This paper reports on the development and application of a model used to estimate the costs of scholarly communication (i.e. scholarly publishing and related activities) in Australian higher education. A systems perspective was used to frame a review of the literature on the costs involved in the entire scholarly communication value chain and inform the development of a scholarly communication system cost model. This paper presents estimated scholarly communication costs for higher education institutions in Australia, based upon the modelling, local data collections and stakeholder consultation, that may prove useful in the management of institutional budgets and priorities. It represents the first systematic attempt to estimate the costs of scholarly publishing related activities in Australia, and it could be easily applied elsewhere.