The Ironless Inductive Position Sensor can be the ideal candidate for linear position sensing in harsh environment and in presence of external magnetic fields. Starting from the validated electromagnetic characteristics, this paper presents a model of thermal effects influencing the sensor's position reading and an effective algorithm to compensate them. The compensation is performed without affecting the nominal sensor's functioning and without using additional temperature probes, which would complicate the sensor's assembly. The model constitutes the basis of this algorithm, which is then validated through experimental measurements on a custom Ironless Position Sensor prototype.