BACKGROUND: In this study, we sought to estimate the societal cost of illness in dementia in Sweden in 2012 using different costing approaches to highlight methodological issues. METHODS: We conducted a prevalence-based cost-of-illness study with a societal perspective. RESULTS: The societal costs of dementia in Sweden in 2012 were SEK 62.9 billion (approximately €7.2 billion, approximately US$9.0 billion) or SEK 398,000 per person with dementia (approximately €45,000, approximately US$57,000). By far the most important cost item is the cost of institutional care: about 60% of the costs. In the sensitivity analysis, different quantification and costing approaches for informal care resulted in a great variation in the total societal cost, ranging from SEK 60 billion (€6.8 billion, US$8.6 billion) to SEK 124 billion (€14.1 billion, US$17.8 billion). CONCLUSIONS: The societal costs of dementia are very high. The cost per person with dementia has decreased somewhat, mainly because of de-institutionalisation. The majority of the costs occur in the social care sector, but the costing of informal care is crucial for the cost estimates.