Seismic loading may result in liquefaction-induced deformation in saturated sand, including seismic settlement and lateral spreading. The permeability coefficient of sand may change after liquefaction. Variation of the permeability coefficient has not been included in the existing models. This is one of the main reasons for the underestimation of the seismic settlement in the numerical simulations comparing to the experimental observations. To analyze the effect of the variation of permeability coefficient on the liquefaction-induced settlement, the settlement in free-field condition is simulated using OpenSees platform, and compared with centrifuge experiments. The proposed model with variable permeability coefficient allows the maximum permeability coefficient during the liquefaction several times of its initial value. Compared with the model with fixed permeability, the proposed model properly describe the evolution of settlement and excess pore water pressure, and improve the accuracy of the settlement prediction in the numerical simulation. The results show that the adopted variable permeability model is capable to simulate the behavior of the sand in the free-field condition under seismic loading with an acceptable accuracy.