The nanoindentation process of a hard coating on a softer substrate has been simulated by the finite element method (FEM). The frequently used three-face Berkovich indenter was simulated by an axisymmetric conical indenter which has the same projected area-depth function as the Berkovich indenter. The present paper discusses the critical ratios of coating thickness to indentation depth at which the substrate has various degrees of effect (2% and 10%) on the indentation response of the layered systems. The influence of the yield strength ratio of the coating to the substrate and the indenter tip geometry in the critical ratio of thickness to depth has been analysed by the finite element simulation. It was found that increasing both the yield strength ratio and the indenter tip radius increases the critical ratio of thickness to depth. Based on the finite element analysis, an empirical equation has been derived, relating the critical ratio of thickness to depth to the yield strength ratio (from 1.5 to 20) and the indenter tip radius (from 0 to 2.0 mu m).