Background Crusted scabies is a debilitating dermatological condition. Although still relatively rare in the urban areas of Australia, rates of crusted scabies in remote Aboriginal communities in the Northern Territory (NT) are reported to be among the highest in the world. Objective To estimate the health system costs associated with diagnosing, treating and managing crusted scabies. Methods A disease pathway model was developed to identify the major phases of managing crusted scabies. In recognition of the higher resource use required to treat more severe cases, the pathway differentiates between crusted scabies severity grades. The disease pathway model was populated with data from a clinical audit of 42 crusted scabies patients diagnosed in the Top-End of Australia’s Northern Territory between July 1, 2016 and May 1, 2018. These data were combined with standard Australian unit costs to calculate the expected costs per patient over a 12-month period, as well as the overall population cost for treating crusted scabies. Findings The expected health care cost per patient diagnosed with crusted scabies is $35,418 Aus- tralian dollars (AUD) (95% CI: $27,000 to $43,800), resulting in an overall cost of $1,558,392AUD (95% CI: $1,188,000 to $1,927,200) for managing all patients diagnosed in data collection and analysis, decision to publish, or preparation of the manuscript. Competing interests: The authors have declared that no competing interests exist. the Northern Territory in a given year (2018). By far, the biggest component of the health care costs falls on the hospital system. Discussion This is the first cost-of-illness analysis for treating crusted scabies. Such analysis will be of value to policy makers and researchers by informing future evaluations of crusted scabies prevention programs and resource allocation decisions. Further research is needed on the wider costs of crusted scabies including non-financial impacts such as the loss in quality of life as well as the burden of care and loss of well-being for patients, families and communities.