Maid Insurance

Can Maid Insurance Help You Save Money in the Long Run?

Just how much does one have to earn to afford a foreign domestic worker in Singapore today? Can having a good maid insurance policy really help you save costs in the long run? We dive deep into the answers.

According to the Ministry of Manpower, there are 246,300 foreign domestic workers working in Singapore as of January 2022, comprising almost 20.5% of the foreign workforce in the country. Not only that, as the demand for foreign domestic workers grow, their bargaining power also has been growing as well, translating into higher salaries and better protection through comprehensive insurance packages.

In addition to paying their monthly salaries, Singaporean households also have to consider the costs of hiring them, providing for the helpers' day-to-day living expenses, and also getting them a good insurance policy. So, what are the exact costs of hiring a foriegn domestic worker, and is the mandatory maid insurance policy just an extra financial burden? How much should you be earning to comfortably afford hiring a foreign domestic worker? We answer all of these questions below.

How Much Does It Cost to Hire a Foreign Domestic Worker?

According to our research, it costs about S$1,434 in one-time fees just to hire a maid foreign domestic worker. Most households hiring a helper for the first time usually go through maid agencies as they take care of all the paperwork and can also help out with mediation if things do not work out between you and your new FDW.

Hiring a helper on your own is definitely cheaper, but you have to be prepared to handle the application process and might have no recourse in case you need to change the hired help.

One-Time FeesAverage Cost
Maid Agency FeeS$1,100
Work Permit ApplicationS$35
Work PermitS$35
Settling-in ProgrammeS$75
Employer's OrientationS$35
Initial Medical ExaminationS$80
Inoculation (optional)S$74

Typically, you can expect to spend another S$1,200 per month on various things like salary, insurance and living expenses. Usually, a FDW's salary is pegged to her nationality with certain countries stipulating a minimum monthly salary for hiring FDWs from them.

In fact, the median salary for new workers is actually quite close to the minimum requirement. However, a FDW’s salary can also vary depending on their experience, and can increase to up to S$1,000 per month in some cases.

Also, hiring new helpers often requires a up-front payment in the form of placement fee, which is usually equivalent to 2 to 5 months of the FDW's salary. However, this fee is subsequently deducted from the maid’s salary in monthly installments for the agreed time period. Also, Singaporeans who live with an elderly person, a child or a person with special needs can apply for a concessional rate of FDW levy at $60 per month in case, which will reduce your cost to $1,000 per month and $12,000 per annum.

Average monthly cost of hiring a FDW in Singapore is about S$1,200 per month

How Can Maid Insurance Help to Save Cost?

Maid insurance is mandatory when you hire a foreign domestic worker in Singapore, and to many, this might seem like an addition financial burden that raises the cost of hiring domestic help even higher than it already is. But just like any other insurance policy, it is important to remember that getting a well-rounded yet affordable maid insurance policy could be an effective way to actually save money in the long run.

All Singaporeans who hire foreign domestic workers are required to purchase a maid insurance policy that covers a minimum of S$15,000 in medical coverage and S$60,000 in personal accident coverage annually.

If you choose your insurance policy well, you will be covered for all sorts of possible unforeseen circumstances that might take place in the future – such as your domestic helper going missing, or even the termination and re-contracting costs that you will incur if you choose to switch helpers for any reason.

While paying for this domestic helper insurance might seem like an unnecessary and additional financial load at the moment, it could ultimately help you save costs in the future when something unexpected happens. With the rising costs of living in Singapore, this might come in handier than you expect.

How do you know which maid insurance policy is the best one? We’ve compiled a list of the most cost-effective, value-for-money options here to help you out.

How Much Should You Earn to Afford a Foreign Domestic Worker in Singapore?

We have talked about how much it generally costs to have a foreign domestic worker in Singapore, but how do you gauge if you’re earning enough to comfortably afford this domestic help?

Local costs of living have definitely been rising amidst the COVID-19 pandemic and a myriad of other economic factors, but we’ve analysed all of these costs to estimate a recommended income that would allow your household to comfortably hire a foreign domestic worker.

According to our analysis, your net income after CPF contribution should be about S$6,000-S$7,000 per month. This amount would be able to cover most of the costs associated with hiring a maid on top of the $4,839 average household spends on food, transportation, education, clothes and entertainment.

Given that the median gross income in Singapore excluding CPF contribution is about S$4,000, this would imply that households with only one member earning an average or below average salary cannot afford to hire a full-time helper. However, families with 2 working adults earning an average salary should be able to afford hiring a domestic help with some financial buffer to spare.

Income required to afford a FDW in Singapore is about S$7,000 per month

In fact, most households in Singapore are earning more than the above amount, with the median household income of S$9,520 per month. Nevertheless, certain jobs definitely pay better than others, making it easier for some to afford the extra help at home than others. For example, the median wage excluding CPF contribution was the highest for financial & insurance services at about S$6,200, while it was the lowest for accommodation and food services at less than S$2,200.

Median Wage Excluding Employer CPF by Industry


The costs of hiring a foreign domestic helper is not a small amount, and you would need at least two working adults in your household who earn an average salary in order to comfortably hire domestic help. Maid insurance can seem like an additional financial burden on top of these already high costs, but it's important to remember that your domestic helper's insurance can save you from exorbitant costs in the event of an unfortunate circumstance in the future.

Compare maid insurance plans to find the best deals and coverage for your needs today!

Tan Boon Hun

Boon Hun spent over five years in the content marketing space as the managing editor of Goody Feed creating interesting and relevant content for the social media generation. In 2022, he moved to the FinTech space while remaining true to his roots, intending to bring financial literacy to more people in Singapore. When not doing his work, he can be found watching people build homes on YouTube.