AIMS:To assess and compare the direct healthcare and non-healthcare costs and government subsidies by body weight and diabetes status. METHODS:The Australian Diabetes, Obesity and Lifestyle study collected health service utilization and health-related expenditure data at the 2011-2012 follow-up surveys. Costing data were available for 4,409 participants. Unit costs for 2016-2017 were used where available or were otherwise inflated to 2016-2017 dollars. Age- and sex-adjusted costs per person were estimated using generalized linear models. RESULTS:The annual total direct cost ranged from $1,998 per person with normal weight to $2,501 per person with obesity in participants without diabetes. For those with diabetes, total direct costs were $2,353 per person with normal weight, $3,263 per person with overweight, and $3,131 per person with obesity. Additional expenditure as government subsidies ranged from $5,649 per person with normal weight and no diabetes to $8,085 per person with overweight and diabetes. In general, direct costs and government subsidies were higher for overweight and obesity compared to normal weight, regardless of diabetes status, but were more noticeable in the diabetes sub-group. The annual total excess cost compared with normal weight people without diabetes was 26% for obesity alone and 46% for those with obesity and diabetes. LIMITATIONS:Participants included in this study represented a healthier cohort than the Australian population. The relatively small sample of people with both obesity and diabetes prevented a more detailed analysis by obesity class. CONCLUSION:Overweight and obesity are associated with increased costs, which are further increased in individuals who also have diabetes. Interventions to prevent overweight and obesity or reduce weight in people who are overweight or obese, and prevent diabetes, should reduce the financial burden.