Background: Day‐case tonsillectomy (DCT) compared with inpatient tonsillectomy has increasingly become a norm for many patients undergoing elective surgeries. Unjustified stays of tonsillectomy can be avoided by day case surgery which consequently reduces treatment costs. The aim of this study was to determine the cost and effectiveness of DCT or outpatient operation in comparison with inpatient tonsillectomy. Methods: This study was a cost-effectiveness study which was performed on 300 patients. Patients were randomly divided into two groups: day case (n = 150) and inpatient (n = 150). Consequences used in model included incidence of bleeding, blood transfusion and re-operation frequency within two weeks after surgery and also the patients’ pain during 24 hours after surgery. This study was conducted from the social perspective; therefore, direct and indirect costs are included in the study. One-way sensitivity analysis was conducted to measure the uncertainty effects of the parameters. The collected data was analyzed using software Tree-Age and Excel 2016. Results: The results showed that DCT was less costly and more cost effective than the inpatient one. Mean total costs in day case and inpatient were $ 915.1 and $ 1227.9, respectively. Besides, the mean effectiveness was 0.921 and 0.914 percent, respectively. Also, one-way sensitivity analysis proved the robustness of the results of the study. Conclusion: The results showed that DCT is a cost-effective strategy and can be suggested as a good alternative for a wide range of patients after tonsillectomy. According to the result of our study, supporting day case surgery for tonsillectomy cases can significantly reduce the financial burden. Keywords: Day Case Tonsillectomy, outpatient tonsillectomy, Inpatient tonsillectomy, Cost-effectiveness analysis