Background Policy makers are on quest for estimates of health costs to achieve maximum efficiency and sustainability. In Jordan, there is a scarcity of information on hospital service costs. Aim The purpose of this study was to estimate the direct cost of hospital services in one of the biggest public hospitals in Amman, Jordan. Methods A retrospective analysis forms a 400‐bed public urban hospital. Costs were estimated in Jordanian dinars (JD) (exchange rate was US$1.41). Results Inpatient costs contributed to 50% of all costs whilst outpatient clinics consumed 17%. Average cost per admission was JD 481.6 (US$674.2), JD 106.7 (US$149.3) per inpatient day and JD 63.1 (US$88.3) per bed day. The average cost per visit to emergency room was JD 14.1 s (US$19.7). Cost per visit to ambulatory care services ranged between JD 37.3 and 473 (US$52.6–662.2). The average cost per surgery was JD 322.1 (US$454.2). Conclusions With high health costs, areas for improvements in efficiency and cost savings must be identified and discussed with managers and policy makers. A larger‐scale study is advocated to understand the costs of various health providers such as military, teaching and private hospitals.