Benefit incidence analysis (BIA) considers who (in terms of socio-economic groups) receive what benefit from using health services. While traditionally BIA has focused on only publicly funded health services, to assess whether or not public subsidies are 'pro-poor', the same methodological approach can be used to assess how well the overall health system is performing in terms of the distribution of service benefits. This is becoming increasingly important in the context of the growing emphasis on promoting universal health systems. To conduct a BIA, a household survey dataset that incorporates both information on health service utilization and some measure of socio-economic status is required. The other core data requirement is unit costs of different types of health service. When utilization rates are combined with unit costs for different health services, the distribution of benefits from using services, expressed in monetary terms, can be estimated and compared with the distribution of the need for health care. This paper aims to provide an introduction to the methods used in the 'traditional' public sector BIA, and how the same methods can be applied to undertake an assessment of the whole health system. We consider what data are required, potential sources of data, deficiencies in data frequently available in low- and middle-income countries, and how these data should be analysed.