H-1B $103,265 fee proposal: US expects $8.8 billion annual revenue

The proposed rule was published by DHS on August 25 after the agency announced the plan on August 24. The fee would apply to H-1B petitions subject to the annual cap, including petitions eligible for the US master’s degree exemption. It would come on top of other applicable H-1B fees and payments if the proposal becomes final.

DHS estimates that charging $103,265 on 85,000 petitions would generate $8.777 billion a year, or about $8.8 billion. The department says the money would help recover federal government costs linked to administering the lawful immigration system. Those costs cover work across several agencies, including US Citizenship and Immigration Services (USCIS), Immigration and Customs Enforcement (ICE), US Customs and Border Protection (CBP), the Executive Office for Immigration Review (EOIR), the State Department and the Department of Labor.

The proposal is not yet a final rule. DHS has opened a public-comment process, and the Federal Register document says comments will be due 30 days after publication. The proposed fee is therefore not a $103,265 payment that employers must pay today.

The proposal comes after the administration’s earlier attempt to impose a $100,000 H-1B payment through a 2025 presidential proclamation faced a court challenge. DHS says the new $103,265 fee relies on a different legal authority.

Why does DHS expect H-1B filings to fall?

The 12% figure comes from DHS’s own filing assumptions. The department’s proposed rule compares its expected annual volume of 85,000 cap-subject H-1B petitions with the five-year annual average of 96,750 cap-subject receipts from fiscal years 2021 through 2025. That difference works out to about 12.1%.

DHS does not describe 85,000 as a forecast of how many people will ultimately receive H-1B status. It uses 85,000 as the expected annual number of fee-paying cap-subject petitions for the purpose of calculating the revenue from the proposed rule.

The distinction matters because the H-1B programme has an annual statutory allocation of 85,000 positions. That consists of 65,000 under the regular cap and another 20,000 for people who qualify for the US advanced-degree exemption.

In previous years, USCIS received more than 85,000 cap-subject petitions. DHS’s data show an average of 96,750 cap-subject receipts a year between FY 2021 and FY 2025. The annual figures ranged from 74,759 in FY 2023 to 111,269 in FY 2022.

DHS said USCIS has historically selected more than 85,000 beneficiaries or registrations because some petitions are later denied, rejected or withdrawn. Under the proposed rule, however, the department expects 85,000 cap-subject petitions to be properly filed and subject to the new fee each year.

The proposed rule also relies on an economic assessment of how employers could respond to a very high fee.

DHS says its analysis found that demand for H-1B petitions is relatively inelastic, meaning employers may not reduce demand in direct proportion to a rise in the cost. The department’s long-run analysis found the fee elasticity of demand for H-1B receipts to be less than one.

DHS also cited a 2026 study by economist George Borjas. The study estimated that employers could be willing to pay a one-time fee of between $100,000 and $200,000 to hire a foreign-born worker. DHS used that research as part of its justification for the proposed $103,265 charge.

The government also says the fee could have an indirect effect on hiring decisions. DHS wrote that employers would be less likely to choose an H-1B worker over a qualified US worker if they had to pay an additional $103,265, unless they had a legitimate need for the specialised skills.

USCIS spokesperson Zach Kahler said the proposed fee is intended to recover government costs linked to the immigration system. “The proposed H-1B fee is intended to recover the costs incurred across the federal government to adjudicate, vet, and support lawful immigration programs that otherwise must be funded by taxpayers,” Kahler said in the USCIS announcement of August 24.

DHS explains where annual revenue would go

The proposed revenue would not remain entirely with USCIS. DHS proposes to allocate about $3 billion to USCIS, which would receive the largest share. The money would support activities such as immigration adjudication, systems modernisation, fraud detection, national security vetting, records management and fee collection.

The proposed allocation also includes about $2.96 billion for EOIR, the Justice Department body responsible for immigration courts and related adjudication. DHS says the funding would support about 8,400 additional positions, including immigration judges, attorneys, legal administrative staff and other support roles.

The Department of Labor would receive about $1.21 billion under the proposal. That money would support programmes linked to labour certification, prevailing wage determinations, H-1B labour-condition processing and enforcement activities.

ICE would receive about $1.05 billion, while the State Department would receive $484 million and CBP about $76.2 million. The proposed allocations add up to the projected $8.777 billion in annual revenue.

DHS says the fee would therefore support a wider set of immigration functions rather than only the processing of the H-1B petition itself.

The proposal would also apply to H-1B cap-subject petitions filed by small employers and nonprofits, although DHS proposes exemptions for cap-exempt H-1B petitions. These include certain petitions filed by institutions of higher education, nonprofit research organisations and government research organisations.

That distinction is important for employers and workers because not every H-1B filing would carry the proposed $103,265 charge. The fee is tied to the annual H-1B cap. DHS specifically says it would not apply to all H-1B petitions or all Form I-129 petitions.

The proposal also does not automatically mean that an H-1B worker will personally pay $103,265. The charge would be imposed on the petitioner at the time of filing.

For Indian professionals, the proposal matters because India remains the largest source of H-1B workers. The latest official data cited in current reporting show Indian nationals accounted for about 70% of H-1B workers in fiscal year 2025.

However, the new proposal does not specifically target Indian workers. It applies to H-1B cap-subject petitions regardless of the worker’s nationality.

The proposed fee is also separate from the earlier $100,000 H-1B payment created under Presidential Proclamation 10973 in September 2025. DHS says the earlier payment applied to certain petitions filed from September 21, 2025, and that a federal district court in Massachusetts vacated the agency guidance implementing it on June 8, 2026. The government appealed the decision on June 11, and that appeal remained pending when DHS published the new proposal.

DHS says the earlier proclamation-based payment and the proposed $103,265 fee rest on different legal authorities. The proposed rule also says the earlier proclamation would expire before the new fee could take effect unless it is extended or renewed.

The new fee therefore represents a separate rulemaking effort. For now, employers do not have to pay the proposed $103,265 charge. DHS must complete the rulemaking process before the fee can take effect. The final amount, scope and implementation details could also change during that process.

If DHS adopts the proposal as written, the department expects 85,000 cap-subject H-1B petitions a year, down from the recent five-year average of 96,750. At $103,265 per petition, that would produce about $8.8 billion in annual revenue for the federal government’s broader immigration system.

Disclaimer: This article is for general informational purposes only and does not constitute legal, immigration, or tax advice. Immigration laws and government policies are subject to frequent change without notice. While we strive to provide accurate updates, readers are strongly advised to verify the latest requirements with the official embassy, consulate, or government portal of the respective country. Financial Express is not responsible for any decisions made based on this information. For personalized guidance, please consult a qualified immigration attorney or a certified professional advisor.