We have studied the diagonal and off-diagonal optical conductivity of a RFe2(R=Gd, Tb, Ho, Lu) and GdCo2 single crystal grown by the flux method. Using spectroscopic ellipsometry we have measured the dielectric function from 1.5 to 5.5 eV. The magneto-optical parameters (Kerr rotation and ellipticity) were obtained using a magneto-optical polar Kerr spectrometer at temperatures between 7 and 295 K and applied magnetic fields between 0.5 to 1.6 T. The apparatus and calibration method are described in detail. Using magneto-optical data and optical constants we derive the experimental value of the off-diagonal conductivity components.;Theoretical calculations of optical conductivities and magneto-optical parameters were performed using the tight binding-linear muffin tin orbitals method within the local spin density approximation. We applied this TB-LMTO method to LuFe2. The obtained theoretical results agree well with the experimental data. The oxidation effects on the diagonal part of the optical conductivity were considered using a three phase model. The oxidation effects on the magneto-optical parameters were also considered by treating the oxide layer as a nonmagnetic thin transparent layer. These corrections change not only the magnitude but also the shape of the optical conductivity and the magneto-optical parameters.