The direct costs of community service were disaggregated to the four principal component activities: assessment, matching, ongoing supervision, and processing breaches. Indirect or hidden costs were estimated. Equivalent procedures were used in the costing of custody, providing a comprehensive base for the comparison of these two penal alternatives. Four general conclusions were drawn from this comparative costing exercise. First, while cheaper than custody, community service is not as cheap as central government figures suggest. The various additions and adjustments necessary to place the costings on a comparable footing and to build in their full service ramifications make community service more expensive than indicated by previously published figures. A second conclusion is that the costs of the two penal sanctions are in a variety of sectors. The indirect costs are not large, but any major shift in sentencing patterns could increase the burden on social work departments and the health service. Third, an important factor in the narrowing of the cost difference between community service and custody was the probability of breach because of noncompliance with the order. Fourth, the available evidence suggests that community service is no less effective than custody in reducing the likelihood of further offending. 17 references