Objective We estimated the incremental (extra) direct medical costs of a population-based cohort of newly diagnosed systemic lupus erythematosus (SLE) for five years before and after diagnosis, and the impact of sex and socioeconomic status (SES) on pre-index costs for SLE. Methods We identified all adults newly diagnosed with SLE over 2001-2010 in British Columbia, Canada, and obtained a sample of non-SLE individuals from the general population, matched on sex, age, and calendar-year of study entry. We captured costs for all outpatient encounters, hospitalisations, and dispensed medications each year. Using generalised linear models, we estimated incremental costs of SLE each year before/after diagnosis (difference in costs between SLE and non-SLE, controlling for covariates). Similar models were used to examine the impact of sex and SES on costs within SLE. Results We included 3632 newly diagnosed SLE (86% female, mean age 49.6 ± 15.9) and 18,060 non-SLE individuals. Over the five years leading up to diagnosis, per-person healthcare costs for SLE patients increased year-over-year by 35%, on average, with the biggest increases in the final two years by 39% and 97%, respectively. Per-person all-cause medical costs for SLE the year after diagnosis (Year + 1) averaged C$12,019 (2013 Canadian) with 58% from hospitalisations, 24% outpatient, and 18% from prescription medications; Year + 1 costs for non-SLE averaged C$2412. Following adjustment for age, sex, urban/rural residence, socioeconomic status, and prior year's comorbidity score, SLE was associated with significantly greater hospitalisation, outpatient, and medication costs than non-SLE in each year of study. Altogether, adjusted incremental costs of SLE rose from C$1131 per person in Year -5 (fifth year before diagnosis) to C$2015 (Year -2), C$3473 (Year -1) and C$6474 (Year + 1). In Years -2, -1 and +1, SLE patients in the lowest SES group had significantly greater costs than the highest SES. Unlike the non-SLE cohort, male patients with SLE had higher costs than females. Annual incremental costs of SLE males (vs. SLE females) rose from C$540 per person in Year -2, to C$1385 in Year -1, and C$2288 in Year + 1. Conclusion Even years before diagnosis, SLE patients incur significantly elevated direct medical costs compared with the age- and sex-matched general population, for hospitalisations, outpatient care, and medications.