Background Postoperative complications after major gastrointestinal surgery are a major contributor to hospital costs. Thus, reducing postoperative complications is a key target for cost-containment strategies. We aimed to evaluate the relationship between postoperative complications and hospital costs following small bowel resection. Methods Postoperative complications were recorded for 284 adult patients undergoing major small bowel resection surgery between January 2013 and June 2018. Complications were defined and graded according to the Clavien-Dindo classification system. In-hospital cost of index admission was calculated using an activity-based costing methodology; it was reported in US dollars at 2019 rates. Regression modeling was used to investigate the relationships among a priori selected perioperative variables, complications, and costs. Findings The overall complication prevalence was 81.6% (95% CI: 85.7-77.5). Most complications (69%) were minor, but 22.9% of patients developed a severe complication (Clavien-Dindo grades III or IV). The unadjusted median total hospital cost for patients with any complication was 70% higher than patients without complications (median [IQR] USD 19,659.64 [13,545.81-35,407.14] vs. 11,551.88 [8,849.46-15,329.87], P < 0.001). The development of 1, 2, 3, and ≥ 4 complications increased hospital costs by 11%, 41%, 50%, and 195%, respectively. Similarly, more severe complications incurred higher hospital costs (P < 0.001). After adjustments were made (for the Charlson Comorbidity Index, anemia, surgical urgency and technique, intraoperative fluid administration, blood transfusion, and hospital readmissions), a greater number and increased severity of complications were associated with a higher adjusted median hospital cost. Patients who experienced complications had an adjusted additional median cost of USD 4,187.10 (95% CI: 1,264.89-7,109.31, P = 0.005) compared to those without complications. Conclusions Postoperative complications are a key target for cost-containment strategies. Our findings demonstrate a high prevalence of postoperative complications following small bowel resection surgery and quantify their associated increase in hospital costs.