A magnetic rotary encoder with feedback unit, including a base, a cover body, a sensing element and a display element. The base has a hollow main body formed with a receiving space. The receiving space has an opening at one end of the main body. The cover body is disposed at the end of the main body of the base to block the opening. The cover body is formed with a through hole in communication with the receiving space. The sensing element is disposed in the receiving space for sensing the motion of a magnetic element disposed on a rotor of a rotary motor. The display element is arranged on the sensing element in alignment with the through hole of the cover body for receiving signals transmitted from the sensing element. The display element has different display modes in accordance with different signals for a user to easily judge the operation state of the rotary motor.