This study examined the cost of traffic congestion on workers’ productivity in Lagos, Nigeria. The study adopted multi-stage sampling technique. Transport corridors prone to congestion were purposively selected. Quoted companies along the selected corridors were stratified and workers in the selected companies were randomly selected. A total of 510 respondents were randomly sampled from the 5100 workers of six (6) selected companies to elicit information on time spent in congestion, costs of traffic congestion and effect of traffic congestion on their performance. Multivariate Regression was used to analyse the effect of cost, time and commuting distance (independent variables) on the performance of workers (dependent variable). Result of MANOVA revealed that 15.6 per cent of variation in workers’ productivity is accounted for by traffic congestion. Based on the Multivariate Regression, it was found that average distance covered (km) ( F = 3.39, p = 0.0015 ), time (min) F = 12.51 p = 0.0000 ) and costs (N) ( F = 31.79, p = 0.0000) are significantly related to traffic congestion. Estimates of costs of traffic congestion on workers’ productivity showed that lateness in the time bracket of 90 minutes is significant ( p< 0.05 ) but negatively related to workers’ productivity. The study concluded that there is inverse relationship between traffic congestion and workers’ productivity, implying that increase in the rate of traffic congestion will lead to low productivity. Therefore, the study recommended that government should endeavour to effect policies that are capable of reducing traffic congestion on the roads in order to improve free flow of traffic that would significantly improve the productivity of workers in both the public and private sectors of the national economy. Key Words: Congestion, Productivity, Cost, Traffic, workers.