BACKGROUND: Smoking is seen as the most important single risk to health today, and is responsible for a high financial burden on healthcare systems and society. This population-based cross-sectional study compares healthcare utilisation, direct medical costs, and costs of productivity losses for different smoking groups: current smokers, former smokers, and never smokers. METHODS: Using a bottom-up approach, data were taken from the German KORA F4 study (2006/2008) on self-reported healthcare utilisation and work absence due to illness for 3,071 adults aged 32-81 years. Unit costs from a societal perspective were applied to utilisation. Utilisation and resulting costs were compared across different smoking groups using generalised linear models to adjust for age, sex, education, alcohol consumption and physical activity. RESULTS: Average annual total costs per survey participant were estimated as €3,844 [95% confidence interval: 3,447-4,233], and differed considerably between smoking groups with never smokers showing €3,237 [2,802-3,735] and former smokers causing €4,398 [3,796-5,058]. There was a positive effect of current and former smoking on the utilisation of healthcare services and on direct and indirect costs. Total annual costs were more than 20% higher (p<0.05) for current smokers and 35% higher (p<0.01) for former smokers compared with never smokers, which corresponds to annual excess costs of €743 and €1,108 per current and former smoker, respectively. CONCLUSIONS: Results indicate that excess costs for current and former smokers impose a large burden on society, and that previous top-down cost approaches produced lower estimates for the costs of care for smoking-related diseases. Efforts must be focused on prevention of smoking to achieve sustainable containment on behalf of the public interest.