Power line communication (PLC) utilizes power lines for transmission of power as well as data transmission. It is an emerging field of communication for the home area network of smart grid. The performance of a PLC system is significantly affected by the additive and multiplicative power line noises; the additive noises are of two types, namely background noise and impulsive noise. Whereas, the multiplicative PLC noise leads to fading in the received signal strength. This paper provides the performance analysis of a PLC system over Rayleigh fading channel under Nakagami-m distributed additive background noise assuming binary phase shift keying modulation scheme. The probability density function of the decision variable is derived. We obtain a numerically computable expression of the analytical average bit error rate of the considered system. The closed-form expression of the outage probability of the PLC system is also computed. Simulation results closely verify the validity of the derived analytical expressions. © 2014 IEEE.