In the analysis of unconfined seepage, the key issue is to find the location of the free surface. Here, the smoothed finite element method (S-FEM) was used to calculate the location of the free surface in the saturated seepage region, and to simulate the influence of different permeability anomalies on the free surface and seepage parameters of earth-rock dams. According to the gradient smoothing technique, a smoothed finite element model for the unconfined seepage was established. The advantage of this method is that the element area is divided into line integrals along the boundary of the element, which simplifies the internal integration process of the boundary intersecting elements and reduces the influence of the element deformation on the calculation results. The calculation results of typical rectangular and trapezoid homogeneous dams were then compared with those of other numerical methods, and the effectiveness of the method proposed in this paper was verified. Meanwhile, the influence of different permeability anomalies on the seepage parameters such as water head distribution, seepage velocity and fluid pressure was further studied. These results can provide a theoretical support and feasible strategy for multi field coupling of earth-rock dams, as well as for inversing the location of the permeability anomalies by changing the distribution of seepage parameters.