OBJECTIVES: Functional dyspepsia is a common, morbid condition but data are limited on the indirect and direct costs for employees with functional dyspepsia or on its impact on productivity. Few data on absenteeism no objective information are available. This study aimed to assess functional dyspepsia's incremental health benefit costs and effects on absenteeism and work output (productivity). METHODS: We performed a retrospective analysis of payroll data and adjudicated health insurance medical and prescription claims collected over a 4-year study period (January 1, 2001–December 31, 2004) from more than 300,000 employees. Data from employees with and without (controls) functional dyspepsia were compared using 2-part regression techniques. Outcome measures included direct and indirect costs paid by the employer, absenteeism, direct costs by the place of service where care was performed, and objectively measured productivity output. RESULTS: Employees with functional dyspepsia (N=1669) had greater average annual direct medical and prescription drug costs and indirect costs (due to sick leave, short- and long-term disability absences) than controls (N=274,206). Compared with controls, the functional dyspepsia employees incurred health benefit costs that were $5,138 greater and had greater costs for each place of service (all P<0.0001). The employees with functional dyspepsia had an additional 0.83 absence days per year and produced 12% fewer units per hour than controls (both P<0.05). CONCLUSIONS: Employees with functional dyspepsia have greater costs at all places of service and lower productivity than employees without functional dyspepsia.