Although mastitis is the most common disease of dairy cattle, estimates of financial losses due to mastitis vary within the literature. The objective of this research is to create a cost-calculation tool that allows dairy producers to estimate their farm’s losses due to mastitis, and to provide dairy managers with more accurate information for making decisions about mastitis control and prevention. The tool takes into account direct and indirect loss components, including fatalities; early culling; milk-yield loss; and costs for treatment, labor, and replacement animals. The tool allows dairy producers to input their herd information (e.g., mastitis prevalence, treatment costs) into a cost worksheet and obtain an estimate of the cost of mastitis on their operation. Information from the National Animal Health Monitoring System’s Dairy 2014 study was used to estimate mastitis prevalence, outcome percentages, as well as treatment and labor costs at the farm level. All operations in the study had at least one case of clinical mastitis; overall, 24.1% of cows were affected with mastitis during 2013. Of affected cows, 72.9% recovered, 24.0% were sold, and 3.1% died. The operation average cost of treating a single case of mastitis in 2013 was $42.05. Additionally, cow-level records from DHIA Dairy Records Processing Centers (DRPCs) throughout the US were used to determine milk-yield losses due to mastitis, as milk-yield reduction accounts for the largest loss associated with mastitis. A hierarchal model using cow-level lactation information from the DRPCs was used to construct milk-yield curves of varying production levels, taking into account herd effects. The construction of yield curves through the hierarchal model allows for the comparison of cows based on lactation average somatic cell counts, thus establishing a loss value. The resulting mastitis-cost estimation tool focuses on determining an accurate cost of mastitis, which justifies investment in mastitis prevention measures.