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Published on 11 Oct 2024 by Lea C.
Hiring a domestic helper in Singapore can be a significant decision for families, especially when considering the long-term financial commitment involved. Whether you're looking to hire help for childcare, elderly care, or general household duties, it’s essential to be well-prepared financially.
At Ministry of Helpers, we understand the importance of making informed decisions, which is why we’ve put together this guide to help you plan your finances before hiring a domestic helper.
1. Understand the initial costs
Hiring a domestic helper involves several upfront costs, many of which you may not anticipate if you're a first-time employer. Here's a breakdown of the typical initial expenses:
- Agency fees: If you’re hiring through a maid agency, expect to pay an agency fee that can range from SGD 1,000 to SGD 3,000 depending on the services provided. This fee covers the cost of sourcing and placing the helper, and often includes administrative processes like documentation and interviews. However, if you hire your helper from Ministry of Helpers, you no longer need to worry about agency fees as you will be directly hiring your maid from us.
- Work permit application: Applying for a domestic helper's work permit with the Ministry of Manpower (MOM) involves a non-refundable application fee of SGD 35, along with a SGD 35 issuance fee.
- Security bond: Employers of foreign domestic workers (FDWs) are required to take out a security bond of SGD 5,000 unless the helper is Malaysian. If your helper absconds or breaches work conditions, this bond is forfeited. However, most employers purchase security bond insurance, which costs between SGD 50 and SGD 300.
- Medical examination: The law requires that your helper undergoes a medical examination upon arrival in Singapore. The cost of the examination usually ranges from SGD 80 to SGD 120.
- Settling-In Programme (SIP): First-time helpers must attend the SIP, which costs around SGD 75. This is a mandatory course designed to help helpers adjust to working in Singapore.
2. Calculate the monthly costs
In addition to the initial expenses, there are recurring monthly costs associated with hiring a domestic helper. Here are the key areas to consider:
- Salary: The monthly salary of a domestic helper in Singapore typically ranges from SGD 500 to SGD 700, depending on their experience, nationality, and the agreed-upon working conditions.
- Foreign worker levy: The standard levy for hiring a domestic helper is SGD 300 per month. However, you can qualify for a concessionary levy of SGD 60 if you meet certain conditions, such as having young children, elderly family members, or individuals with disabilities living in the household.
- Living expenses: Employers are responsible for providing meals and accommodation for their domestic helper. This means you’ll need to account for additional food costs, utilities, and possibly changes in household arrangements (e.g., allocating a room or shared space).
- Medical insurance and accident coverage: Employers must provide medical insurance with coverage of at least SGD 60,000 per year for inpatient care and day surgery. Additionally, you need to purchase personal accident insurance with a minimum coverage of SGD 60,000 per year. One of the trusted maid insurance companies in Singapore is Insurance Market.
- Rest days and compensation: By law, helpers are entitled to one rest day per week. If you require your helper to work on a rest day, you must either provide an alternative day off or compensate them in cash.
3. Emergency fund for unforeseen costs
Unexpected expenses can arise during the employment of a domestic helper, including:
- Medical expenses: While insurance covers most major medical costs, you may still need to pay for out-of-pocket expenses like GP visits, dental care, or medication.
- Replacement costs: If your helper leaves prematurely or if the employment doesn’t work out, you may need to pay for replacement fees through an agency, airfare for the helper’s repatriation, and other administrative costs.
- Termination costs: In case of early termination, employers are responsible for covering the cost of repatriation and any outstanding salary or compensation due to the helper.
Tip: Set aside an emergency fund to cover at least 1-2 months’ worth of salary and any potential unexpected costs. This will help you manage any sudden changes in employment without financial strain.
4. Plan for annual and long-term costs
In addition to monthly expenses, there are some annual and long-term costs to keep in mind:
- Renewal of work permit: Your helper’s work permit must be renewed every two years, along with medical check-ups.
- Annual home leave: Helpers are often entitled to home leave to visit their families, and you may be required to cover the cost of airfare and travel expenses if this is part of your employment agreement.
- Bonuses and salary increments: It’s common for employers to reward their helpers with bonuses during festive periods or after a year of good service. Salary increments over time are also standard practice to retain experienced helpers.
Tip: Include annual leave and bonuses in your financial planning to avoid last-minute budget crunches. Discuss long-term expectations with your helper from the start to ensure clarity on future benefits.
5. Evaluate Your financial capacity
Before hiring a helper, take a close look at your current financial situation. Evaluate your household income and expenses, and determine whether hiring a helper is a financially viable decision. Consider how this new expense will impact your budget and whether you can maintain these costs over the long term.
Tip: Create a detailed household budget that includes current expenses (mortgage, utilities, groceries, etc.) and factor in the added costs of hiring a domestic helper. This will give you a clearer picture of how this decision will affect your finances.
Hiring a domestic helper in Singapore is a significant financial commitment that requires careful planning and budgeting. By understanding the initial, monthly, and long-term costs, as well as preparing for emergencies, you can make an informed decision that aligns with your household’s needs and financial situation.
At Ministry of Helpers, we are here to guide you through every step of the hiring process. Whether you’re seeking advice on budgeting, employment laws, or managing your helper, our platform provides the resources you need to ensure a smooth experience.
Ready to start planning? Visit our website to access our tools, tips, and expert support for hiring and managing your domestic helper with confidence!
You Might Be Interested In:
What You Need To Know Before Hiring A Domestic Helper in Singapore
Selecting the Ideal Domestic Helper in Singapore: 10 Essential Interview Questions
The Rights and Responsibilities of MDW Employers in Singapore
5 Simple Steps to Hire a Maid in Singapore Without An Agency
How To Assist a Domestic Helper To Transfer Employers in Singapore
Hiring a domestic helper in Singapore can be a significant decision for families, especially when considering the long-term financial commitment involved. Whether you're looking to hire help for childcare, elderly care, or general household duties, it’s essential to be well-prepared financially.
At Ministry of Helpers, we understand the importance of making informed decisions, which is why we’ve put together this guide to help you plan your finances before hiring a domestic helper.
1. Understand the initial costs
Hiring a domestic helper involves several upfront costs, many of which you may not anticipate if you're a first-time employer. Here's a breakdown of the typical initial expenses:
- Agency fees: If you’re hiring through a maid agency, expect to pay an agency fee that can range from SGD 1,000 to SGD 3,000 depending on the services provided. This fee covers the cost of sourcing and placing the helper, and often includes administrative processes like documentation and interviews. However, if you hire your helper from Ministry of Helpers, you no longer need to worry about agency fees as you will be directly hiring your maid from us.
- Work permit application: Applying for a domestic helper's work permit with the Ministry of Manpower (MOM) involves a non-refundable application fee of SGD 35, along with a SGD 35 issuance fee.
- Security bond: Employers of foreign domestic workers (FDWs) are required to take out a security bond of SGD 5,000 unless the helper is Malaysian. If your helper absconds or breaches work conditions, this bond is forfeited. However, most employers purchase security bond insurance, which costs between SGD 50 and SGD 300.
- Medical examination: The law requires that your helper undergoes a medical examination upon arrival in Singapore. The cost of the examination usually ranges from SGD 80 to SGD 120.
- Settling-In Programme (SIP): First-time helpers must attend the SIP, which costs around SGD 75. This is a mandatory course designed to help helpers adjust to working in Singapore.
2. Calculate the monthly costs
In addition to the initial expenses, there are recurring monthly costs associated with hiring a domestic helper. Here are the key areas to consider:
- Salary: The monthly salary of a domestic helper in Singapore typically ranges from SGD 500 to SGD 700, depending on their experience, nationality, and the agreed-upon working conditions.
- Foreign worker levy: The standard levy for hiring a domestic helper is SGD 300 per month. However, you can qualify for a concessionary levy of SGD 60 if you meet certain conditions, such as having young children, elderly family members, or individuals with disabilities living in the household.
- Living expenses: Employers are responsible for providing meals and accommodation for their domestic helper. This means you’ll need to account for additional food costs, utilities, and possibly changes in household arrangements (e.g., allocating a room or shared space).
- Medical insurance and accident coverage: Employers must provide medical insurance with coverage of at least SGD 60,000 per year for inpatient care and day surgery. Additionally, you need to purchase personal accident insurance with a minimum coverage of SGD 60,000 per year. One of the trusted maid insurance companies in Singapore is Insurance Market.
- Rest days and compensation: By law, helpers are entitled to one rest day per week. If you require your helper to work on a rest day, you must either provide an alternative day off or compensate them in cash.
3. Emergency fund for unforeseen costs
Unexpected expenses can arise during the employment of a domestic helper, including:
- Medical expenses: While insurance covers most major medical costs, you may still need to pay for out-of-pocket expenses like GP visits, dental care, or medication.
- Replacement costs: If your helper leaves prematurely or if the employment doesn’t work out, you may need to pay for replacement fees through an agency, airfare for the helper’s repatriation, and other administrative costs.
- Termination costs: In case of early termination, employers are responsible for covering the cost of repatriation and any outstanding salary or compensation due to the helper.
Tip: Set aside an emergency fund to cover at least 1-2 months’ worth of salary and any potential unexpected costs. This will help you manage any sudden changes in employment without financial strain.
4. Plan for annual and long-term costs
In addition to monthly expenses, there are some annual and long-term costs to keep in mind:
- Renewal of work permit: Your helper’s work permit must be renewed every two years, along with medical check-ups.
- Annual home leave: Helpers are often entitled to home leave to visit their families, and you may be required to cover the cost of airfare and travel expenses if this is part of your employment agreement.
- Bonuses and salary increments: It’s common for employers to reward their helpers with bonuses during festive periods or after a year of good service. Salary increments over time are also standard practice to retain experienced helpers.
Tip: Include annual leave and bonuses in your financial planning to avoid last-minute budget crunches. Discuss long-term expectations with your helper from the start to ensure clarity on future benefits.
5. Evaluate Your financial capacity
Before hiring a helper, take a close look at your current financial situation. Evaluate your household income and expenses, and determine whether hiring a helper is a financially viable decision. Consider how this new expense will impact your budget and whether you can maintain these costs over the long term.
Tip: Create a detailed household budget that includes current expenses (mortgage, utilities, groceries, etc.) and factor in the added costs of hiring a domestic helper. This will give you a clearer picture of how this decision will affect your finances.
Hiring a domestic helper in Singapore is a significant financial commitment that requires careful planning and budgeting. By understanding the initial, monthly, and long-term costs, as well as preparing for emergencies, you can make an informed decision that aligns with your household’s needs and financial situation.
At Ministry of Helpers, we are here to guide you through every step of the hiring process. Whether you’re seeking advice on budgeting, employment laws, or managing your helper, our platform provides the resources you need to ensure a smooth experience.
Ready to start planning? Visit our website to access our tools, tips, and expert support for hiring and managing your domestic helper with confidence!
You Might Be Interested In:
What You Need To Know Before Hiring A Domestic Helper in Singapore
Selecting the Ideal Domestic Helper in Singapore: 10 Essential Interview Questions
The Rights and Responsibilities of MDW Employers in Singapore
5 Simple Steps to Hire a Maid in Singapore Without An Agency
How To Assist a Domestic Helper To Transfer Employers in Singapore