Objective Pressure injuries (PI) are largely preventable and can be viewed as an adverse outcome of a healthcare admission, yet they affect millions of people and consume billions of dollars in healthcare spending. The existing literature in Australia presents a patchy picture of the economic burden of PI on society and the health system. The aim of the present study was to provide a more comprehensive and updated picture of PI by state and severity using publicly available data. Methods A cost-of-illness analysis was conducted using a prevalence approach and a 1-year time horizon based on data from the existing literature extrapolated using simulation methods to estimate the costs by PI severity and state subgroups. Results The treatment cost across all states and severity in 2012-13 was estimated to be A$983million per annum, representing approximately 1.9% of all public hospital expenditure or 0.6% of the public recurrent health expenditure. The opportunity cost was valued at an additional A$820million per annum. These estimates were associated with a total number of 121645 PI cases in 2012-13 and a total number of 524661 bed days lost. Conclusions The costs estimated in the present study highlight the economic waste for the Australian health system associated with a largely avoidable injury. Wastage can also be reduced by preventing moderate injuries (Stage I and II) from developing into severe cases (Stage III and IV), because the severe cases, accounting for 12% of cases, mounted to 30% of the total cost.