Background: This study aimed to quantify the absenteeism costs of knee and hip osteoarthritis in the Netherlands for the Dutch workforce and specific groups of workers. Methods: We used a longitudinal, dynamic database from a large occupational health service in which occupational physicians register information about personal information and sick leave of workers with the diagnosis of knee- and/or hip osteoarthritis. We included all employees aged 15 to 75 years performing paid work and diagnosed with knee and/or hip osteoarthritis. Costs were calculated annually and per episode for different subgroups from an employer’s perspective using the Human Capital Approach. In the Netherlands, the employer has to pay 70% of the employee's wage out of pocket for the first two years of sick leave and also for the occupational health care. In this way, employers receive information about the costs of workers on sick leave due to knee or hip osteoarthritis. This might stimulate investments in targeted prevention and work-directed care. Results: For the period 2015–2017, 1399 workers fulfilled the inclusion criteria. An average sick leave episode of knee osteoarthritis had a duration of 186 calendar days and was associated with €15,550 in costs. For hip osteoarthritis these data were 159 calendar days and €12,482 in costs. These costs are particularly high among male workers and workers with a higher number of weekly working hours. The average annual costs for the Dutch workforce due to sick leave for knee and hip osteoarthritis were €26.9 million and €13.8 million, respectively. Sick leave costs decreased for hip and not for knee osteoarthritis during 2015–2017. Conclusions: Annual sick leave costs due to knee and hip osteoarthritis are about €40 million for the Dutch workforce and approximately twice as high for knee compared to hip osteoarthritis. Average costs per sick leave episode are particularly high among male workers and workers with a higher number of weekly working hours.