There is little experience in Portugal with the separate collection of the biodegradable fraction of municipal solid waste (MSW). Therefore, it is relevant to evaluate how this process could economically affect the actual practices of MSW collection in small municipalities. This article simulates the costs of collection by means of a fixed container system and a transfer station, using values from a municipality with a population of 28,000 inhabitants. The main goal of this exercise is to compare the economic effects of three alternative scenarios: (i) the traditional, unsorted collection; (ii) the separate collection of whole biowaste; and (iii) the separate collection of biowaste generated in the major urban communities, while setting aside the other biowaste for home composting. The input data are from 2001, and include waste quantities, travel times, work crew composition, crew time shifts, vehicles, and containers. Calculations of the proposed mathematical method were carried out using the Microsoft Excel software. This study concludes that the global cost for separate collection of biowaste (alternative ii) need not necessarily be higher than the corresponding cost of the traditional, unsorted method of collection (alternative i). Furthermore, the global cost for collection with separated biowaste and home composting (alternative iii) could also be lower than the corresponding cost of the traditional, unsorted method of collection.