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Aim Sacral neuromodulation (SNM) plays a major part in the algorithm of management of faecal incontinence, but there are limited data on its cost-effectiveness. This study aimed to analyse this and the quality-adjusted life-years (QALYs) associated with two different treatment algorithms. The first (SNM−) included use of an artificial sphincter [dynamic graciloplasty (DGP) (50%) and artificial bowel sphincter (ABS) (50%)]. The second (SNM+) included SNM (80% of cases) and artificial sphincter (DGP 10%; ABS 10%) The incidence of sphincteroplasty was assumed to be equal in both algorithms. Method A Markov model was developed. A hypothetical cohort of patients was run through both strategies of the model. A mailed EuroQoL-5D questionnaire was used to determine health-related quality of life. Costs were reproduced from the Maastricht University Medical Centre prospective faecal incontinence database. The time scale of the analysis was 5 years. Results The former treatment protocol cost €22 651 per patient and the latter, after the introduction of SNM, cost €16 473 per patient. The former treatment protocol resulted in a success rate of 0.59 after 5 years, whereas with the introduction of SNM this was 0.82. Adhering to the former treatment protocol yielded 4.14 QALYs and implementing the latter produced 4.21 QALYs. Conclusion The study demonstrated that introducing SNM in the surgical management algorithm for faecal incontinence was both more effective and less costly than DGP or ABS without SNM. This justifies adequate funding for SNM for patients with faecal incontinence.