OBJECTIVES: Cigarette smoking imposes a significant burden on employers as a consequence of increased absenteeism and smoking-related breaks during the working day. Despite the evidence supporting the efficacy and cost-effectiveness of smoking cessation treatments (SCTs), relatively few private drug plans reimburse such treatments. The objectives of this study were to calculate the projected budget impact and return on investment for an employer funded drug plan in Canada in the first 3 years of introducing SCT coverage. METHODS: A recently published state-transition model reflecting relevant smoking statuses was used for the analyses. The model involves a comparison of the clinical and economic outcomes for a hypothetical cohort of 10,000 Canadian workers followed for three years. The relative efficacy of various smoking cessation strategies (varenicline, bupropion, nicotine replacement therapy and unaided cessation) were taken from the literature. Canadian data were used to determine the population of smokers, marketplace dynamics, SCT costs, smoking-related absenteeism and lost productivity. One-way sensitivity analyses were performed. RESULTS: The analysis lead to an estimate of 1,801 employees who were smokers at baseline. An estimated incremental total of 79 smokers would successfully quit smoking by the end of the 3-year time horizon with a SCT reimbursement program compared with a no coverage scenario. Budget impact associated with the SCT coverage scenario equated to $164,182 while projected savings to employers were estimated at $381,292 over 3 years. This represented projected net savings to employers of $217,110 and a return on investment of $2.32 for every dollar spent to support a SCT reimbursement program. One-way sensitivity analyses confirmed the robustness of the findings. CONCLUSIONS: For a relatively modest investment, a SCT reimbursement program in the Canadian workplace is likely to reduce the number of smokers in the workforce, while generating a positive return on investment for employers within a short timescale.