OBJECTIVES: To examine formal and informal cost of providing care (i.e., direct non-medical costs) for the elderly with dementia in community and to analyze the impact of providing care by caregivers on physical and mental health based on household perspective in outpatient clinics at an university-based hospital in Bangkok during February-July 2007. METHODS: : One hundred primary caregivers for patients with dementia who received the medical care from out-patient clinics at the internal medicine, psychiatric or family medicine department were diagnosed with probable Alzheimer’s disease or Vascular dementia were selected.  Data were collected by questionnaires from proxy respondents or primary caregivers. Cost included the value of caregiving time to provide care by family members without financial compensation (informal care) or other caregivers with financial compensation (formal care). The time inputs of informal caregivers were valued according to both opportunity and replacement costs. The impact on mental and health of caregivers providing care for patients was also assessed. In addition, stepwise multiple regression was employed to create a variables that affect the cost of care. RESULTS: The average annual cost per patient of providing care for the elderly with dementia in community was BAHT85,800 and BAHT98,858, when valuing the time spent on providing informal care by productivity cost and time cost methods, respectively.  Informal care cost is the largest component of total costs (81.53% by productivity cost method and 83.97% by time cost method). The annual replacement cost was estimated to be BAHT57,799/patient. The increase in cost was due to the increase in caregiving time required for the provision of physical care.  The majority of stress and physical strain complaints were found in caregivers and increased with patient’s disease severity. Based on the fitted model, the significant explanatory variables included disease severity of patients, education and occupation of caregivers. The model could explain approximately forty percent of the case. CONCLUSIONS: The costs of informal and formal care provided care by family and employed caregivers account for 80% and 20%, respectively.  Applications in other areas are needed for further investigation.