AIMS: The aim of the article is to undertake the first economic analysis exploring the costs of illness (COIs) and factors affecting COIs in people living with mental disorders using individual patient-level data across five countries with different national income levels. This is done by investigating diagnosis-related and sociodemographic factors for country-specific medical and psychosocial service use in these high, lower-middle and low-income countries. METHODS: Using data from the Using Peer Support In Developing Empowering Mental Health Services (UPSIDES) study, a pragmatic randomized controlled trial, costs for medical and psychosocial services have been estimated over 6 months in 615 people with severe mental illness from Germany ( = 171), Uganda ( = 138), Tanzania ( = 110), India ( = 93) and Israel ( = 103). The primary economic analysis included (1) total COI expressed in 2021 international dollars and (2) proportional cost-type expenditures. Generalized linear regression models were also used to estimate the impact of psychiatric diagnosis, social disability, age and gender on the total COI. RESULTS: Of the 615 participants (mean [SD] age 38.3 [11.2] years; 335 [54.5%] women), the total 6-month COI ranged from $311.48 [±547.47] in Tanzania to $10,493.19 [±13324.10] in Germany. High-income Germany and low-income Uganda both concentrated >70% of COIs on inpatient care. High-income Israel had the most balanced COI, with the lowest mean share (15.40%) on inpatient care, compared with community (35.12%) and primary care (33.01%). Female gender was associated with lower COI ( = 0.215; = 0.000) in Tanzania, while in India diagnosis of depression was associated with lower costs than schizophrenia ( = 0.363; = 0.017). Health of the Nation Outcome Scale scores (social disability) were not significantly associated with COIs in any country. In Tanzania, the total mean COI increased by 3.6% for every additional year of age. Compared to Germany, mean COIs were significantly lower by 90%, 99% and 86% in Uganda, Tanzania and India, respectively, and by 50% in Israel, although this difference was not significant. CONCLUSIONS: National income is correlated with the total COI in people living with mental disorders but is a poor predictor of the sector-specific distribution of these expenditures.