A method is presented for the direct measurement of the internal quantum efficiency in light emitting diodes (LEDs), based on the ratio of the measured external quantum efficiency and the calculated light extraction efficiency. The external quantum efficiency is measured from a single facet of the device in a simple, well-defined geometry, for which the light extraction efficiency can be calculated with good accuracy. In the proposed method, all LED facets are coated with highly absorbing material which suppresses any light that is not directly emitted into a small aperture on the top facet of the LED. We present a full wave optical model for a multilayer LED structure, from which we derive and validate an approximate model to easily calculate the extraction efficiency through the top facet of the LED. Because a current spreading electrode, often metallic, is required for uniform injection, we show that its impact on the extraction efficiency can be simply modeled through a separate transmission function calculated from the complex index of refraction of the electrode material. The various assumptions made to justify the direct emission model through a single facet (absence of photon backscatter, no photon recycling, simplified device layer model) are discussed and evaluated. The model is applied to a specific GaN LED structure. (C) 2011 American Institute of Physics. [doi:10.1063/1.3549730]