This paper analyzes the effect of velocity filtering cut-off frequency on the Z-width performance of haptic interfaces. Finite difference method (FDM) cascaded with a low pass filter is the most commonly used technique for estimating velocity from position data in haptic interfaces. So far, there is no prescribed method for obtaining the FDM + filter cut-off frequency that will maximize Z-width performance. We present a simulation based method to demonstrate that there exists such an ideal FDM + filter cut-off frequency, and that it can be predicted by numerical simulation based on an identified model of a haptic interface. Experiments are conducted on a single degree-of-freedom (DOF) linear haptic interface to validate the simulation results.