Metal foil strain gauges are most widely used for the stress analysis in engineering structures. Typical strain gauge system includes strain sensitive grid, carrier material, and adhesive layer. Strain measurement from the strain gauge is partially affected by carrier and adhesive materials and their thickness. In the present work, a Finite Element Model is developed in order to study the effect of both adhesive layer and carrier thickness on strain measurements while using strain gauges. To understand the behavior of the adhesive material, mechanical characterization is done on bulk adhesive specimen. Finite Element Analysis (FEA) is carried out with different materials namely epoxy and polyurethane. Initially a single element foil loop is considered for the analysis and further this is extended to metal foil strain gauge with nine end-loops. Finally, the strain variation through thickness of adhesive layer, carrier and strain sensitive grid is obtained from FEA. The results thus obtained are compared with analytical results from Basic Strength of Materials approach.