A set of universal guidelines is needed to determine the limit of detection (LOD) in PCR‐based analyses of low‐concentration DNA. In particular, environmental DNA (eDNA) studies require sensitive and reliable methods to detect rare and cryptic species through shed genetic material in environmental samples. Current strategies for assessing detection limits of eDNA are either too stringent or subjective, possibly resulting in biased estimates of species’ presence. Here, a conservative LOD analysis grounded in analytical chemistry is proposed to correct for overestimated DNA concentrations predominantly caused by the concentration plateau, a nonlinear relationship between expected and measured DNA concentrations. We have used statistical criteria to establish formal mathematical models for both quantitative and droplet digital PCR. To assess the method, a new Grass Carp (Ctenopharyngodon idella) TaqMan assay was developed and tested on both PCR platforms using eDNA in water samples. The LOD adjustment reduced Grass Carp occupancy and detection estimates while increasing uncertainty—indicating that caution needs to be applied to eDNA data without LOD correction. Compared to quantitative PCR, digital PCR had higher occurrence estimates due to increased sensitivity and dilution of inhibitors at low concentrations. Without accurate LOD correction, species occurrence and detection probabilities based on eDNA estimates are prone to a source of bias that cannot be reduced by an increase in sample size or PCR replicates. Other applications also could benefit from a standardized LOD such as GMO food analysis and forensic and clinical diagnostics.