Trump Proposes Doubling H-1B Visa Fee to $203,265
On August 24, the U.S. Department of Homeland Security (DHS) proposed a new rule draft to impose an additional fee of $103,265 on H-1B work visa applications. Combined with the previously implemented but currently frozen $100,000 visa surcharge, the total cost for employers to sponsor an H-1B employee could exceed $200,000, effectively doubling the current fee level.
The new rule is currently in the public comment phase, with feedback accepted until September 24. It has not yet officially taken effect and will require the publication of final rules after the comment period ends to be implemented. The DHS stated that this new fee will serve as a "special revenue mechanism" to cover the costs of managing the legal immigration system, with an estimated $8.8 billion in revenue for the federal government over the next decade. Approximately $3 billion is allocated to the U.S. Citizenship and Immigration Services (USCIS), $1 billion to Immigration and Customs Enforcement (ICE), $76 million to Customs and Border Protection (CBP), $3 billion to the immigration court system, $1.2 billion to the Department of Labor, and $484 million to the State Department.
The previously implemented $100,000 surcharge originated from Executive Order 10973 signed by Trump on September 19, 2025, which mandated that employers pay an additional $100,000 for H-1B applications submitted from outside the U.S. (primarily for beneficiaries located outside the U.S. at the time of application or those undergoing consular processing). However, in June, U.S. District Judge Leo Sorokin ruled that this fee was "illegal" and "arbitrary and capricious." On July 24, the First Circuit Court of Appeals denied the government's emergency request to stay that ruling, and the $100,000 fee is currently unenforceable, with the case still under appeal. There are two related federal lawsuits pending, one of which is due on September 20.
Unlike the previously imposed $100,000 fee, which was deemed an overreach by the courts, the newly proposed $103,265 fee is being introduced through the formal administrative rule-making process by the DHS, theoretically aligning more closely with the statutory authority for administrative agencies to impose fees. However, the Department of Justice previously argued that the $100,000 fee was an immigration management measure (administrative authority) rather than a tax (Congressional authority), and this legal dispute is expected to continue with the new rule.
Data shows that the current annual cap for new H-1B visas is 85,000 (including 65,000 regular visas and 20,000 master's degree exemptions). Indian applicants are the largest beneficiary group of H-1B visas, with 283,772 approvals for Indian nationals in FY 2025, accounting for about 73% of total approvals. Tech giants like Amazon, Apple, Google, and Meta consistently rank among the top employers for H-1B usage (with approved numbers ranging from 9,337 to 2,563).
From the perspective of corporate costs and labor market mechanisms, the continuous increase in H-1B visa fees essentially artificially inflates the "cost of bringing in high-skilled talent from abroad" that would otherwise be determined by the market. For tech companies like Amazon, Apple, Google, and Meta, which apply for thousands of H-1B visas annually, if the total cost of $200,000 is confirmed, the fixed cost of processing a visa for a single employee could exceed half or even approach the entire annual salary, directly reducing the incentive for companies to continue using the H-1B channel to recruit overseas engineers. This could objectively push some positions to transfer to overseas branches in India, Canada, etc., or accelerate the process of replacing some technical positions with automation and AI tools. The U.S. Chamber of Commerce has stated it will continue to challenge such fees in court, arguing that the high costs will make the H-1B program "too expensive to consider," undermining the innovation and job creation capabilities of U.S. businesses. Meanwhile, several U.S. universities and healthcare institutions have warned that rising fees will also impact the overseas doctors and researchers reliant on H-1B visas. Federal government estimates indicate that the U.S. is expected to face a shortage of about 86,000 doctors over the next decade, which may further exacerbate the shortage of medical talent.
Supplementary information: Public records show that the new rule received over 5,000 public comments in its first week of soliciting feedback. The previous $100,000 fee was estimated by the University of Michigan to add about $9 million in costs annually, reflecting the financial pressure on universities and research institutions due to rising visa fees.
Source: Public Information
ABAB AI Insight
The Trump administration's historical actions on the H-1B visa issue have laid the groundwork since its first term: the 2017 "Buy American, Hire American" executive order strengthened scrutiny of H-1B visas, and at the end of his term, there was an attempt to introduce rules redistributing quotas based on salary levels, which were later shelved by the Biden administration. This term, starting with the $100,000 surcharge directly imposed via presidential executive order in September 2025, which was ruled as an overreach by the courts, the administration has now shifted to proposing a new fee of $103,265 through the formal administrative rule-making process by the DHS—this is a typical operational model of pursuing the same policy goal through a different legal pathway after the first one was blocked by the courts, a method also seen in other policy areas of this administration (such as tariffs).
In terms of funding, this money has not disappeared but is clearly earmarked: of the expected $8.8 billion in revenue over ten years, ICE and CBP are set to receive over $1 billion combined. This means that the additional fees paid by companies for legally bringing in high-skilled immigrants are effectively subsidizing the enforcement system aimed at combating illegal immigration. For companies, the increase in fixed costs will change the critical point of resource allocation—when the fixed visa cost for a single H-1B employee approaches or exceeds half of their six-month salary, capital will be more inclined to shift engineering positions to overseas branches in India, Canada, Eastern Europe, etc., or increase investment in automation and AI tools to replace some technical positions, rather than continue down the increasingly expensive H-1B pathway.
Historically, this is highly similar to the administration's approach to tariff policy: when one administrative action is blocked by the courts, it is reintroduced under a different legal basis. It can also be compared to the UK's skilled worker visa surcharge and Australia's skilled immigration fees—using fees rather than quotas to indirectly filter for "high-value" positions willing to pay high prices for visas. The current situation faced by the tech industry is reminiscent of the impact when H-1B issuance was temporarily suspended during the 2020 pandemic, but this time the tool has shifted from "direct prohibition" to "fee pricing," allowing cash-rich giants like Amazon, Google, and Meta to absorb this cost, while startups, universities, and hospitals with thinner profit margins that rely on H-1B talent will be disproportionately squeezed out of this pathway.
Structurally, this is essentially a "reallocation of pricing power" achieved through regulatory changes: raising the fixed costs of a legitimate pathway does not directly prohibit the activity itself but rather re-prices it—this inherently benefits large companies that can view the $200,000 visa fee as a "bookkeeping error," while squeezing out small employers, universities, and healthcare systems from competing for the same 85,000 annual visa slots. This mechanism of "using fees as quotas" rather than "directly limiting numbers" is the core logic of current immigration restriction policies leveraging fees, and whether this new fee constitutes a legitimate administrative fee or a de facto unconstitutional tax remains a crucial dividing line in determining whether these two versions of the policy can withstand judicial scrutiny.