OBJECTIVES Detailed and valid information on burden of disease is an indispensable cornerstone for cost-effectiveness analyses. The aim of this study was to estimate the epidemiological and economic burden of varicella and herpes zoster (HZ) in Germany in order to generate important data for a subsequent model-based analysis. METHODS Analysis of the epidemiology and the one-year costs of varicella-zoster virus-related diseases/complications were based on 2010/2011 claims data from a large German sickness fund. Insurants were included in the study when they had a varicella and/or HZ diagnosis in 2010, and then were followed for one year after the date of the initial diagnosis. Disease-attributable costs were either calculated by diagnosis-specific identification of cost items or by use of a control group approach. RESULTS The study population included 12,710 insurants with varicella and 35,636 insured persons with HZ. Age-standardised incidence rates were 1.55 and 5.5 per 1,000 person-years for varicella and HZ, respectively. The most frequent complication of HZ was post-herpetic neuralgia (PHN) with an overall proportion of 20.76%, ranging from 2.66% under the age of 10 years to 26.03% in the age group of 80 years and above. When using a time-based algorithm instead of a pure diagnosis code-based approach overall PHN proportion was much lower (5.29%). Average direct costs of varicella were €76.41, ranging from €45.92 in children <5 years of age to €444.28 in people aged ≥60 years. Direct costs of HZ (including PHN) were €238.47 with a range from €88.51 in children <10 years of age to €504.40 in people aged ≥80 years. CONCLUSIONS Varicella-zoster virus-related diseases/complications cause a remarkable epidemiological and economic burden on the German health care system. Incidence and costs of varicella and HZ are highly age-dependent. Furthermore, the proportion of PHN was strongly influenced by the algorithm used to identify PHN cases.