Micromilling process is widely used in biomedical and aerospace industries to produce complex 3D microscale features and components. The benefits of the micromilling process are ability of processing of wide range of materials, high quality surface finish, high material removal rate and submicron accuracy. One of the key limitations of micromachining is the low flexural stiffness of the microtool which can lead to chatter. Chatter in micromilling can be avoided by using the machining parameters within the stability limits. To predict the accurate stability limits, the tool tip dynamics need to be determined precisely. In this paper, a finite element method for determination of modal parameters has been proposed which considers the machine tool compliance at the clamping. The modeling of micro endmill and machine compliance is achieved by introducing elastic foundation interaction at the clamping interface. The model is further validated using experimental modal analysis on micro endmill at various locations and the results obtained were found to be in agreement with simulated results.