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Smokers take an average of 2.7 more sick days each year than their non-smoking colleagues, and in the process cost UK businesses £1.4 billion in lost productivity.
Research from the University of Nottingham, published in the journal Addiction, concluded that smoking is linked to higher rates of both short- and long-term absences.
The research analysed the results of 29 previous studies conducted globally from 1960 to 2011, covering more than 71,000 public- and private-sector workers.
Individuals were questioned about their lifetime smoking habits and employment records were used to track absenteeism rates over two years.
Smokers were 33% more likely to miss work than non-smokers and were absent an average of 2.7 extra days per year, according to Dr Jo Leonardi-Bee and Stephen Weng of the university's UK centre for tobacco control studies.
"Quitting smoking appears to reduce absenteeism and result in substantial cost savings for employers," said Leonardi-Bee.
The cost of lung cancer to the UK economy, meanwhile, has been calculated at £2.4 billion per year, far higher than the cost of any other cancer.
The Oxford University research was presented at the National Cancer Research Institute's Cancer Conference in Liverpool in November this year.
The study found that the total annual cost of all cancers to the UK economy is £15.8 billion.
Half (£7.6 billion) of the total economic cost of cancer to the UK is because of premature deaths and time off work, followed by healthcare costs (35% or £5.6 billion) and unpaid care to cancer patients by friends and family (16% or £2.6 billion). Healthcare spending represents a cost of £90 per person in the UK, it added.
