A five-person software shop in Ohio finds the perfect backend engineer. She's finishing a master's degree in the US, she's authorized to work, and she's exactly what the team needs. Then the offer letter stalls, because sponsoring her H-1B might now cost the company $100,000 before she ever writes a line of code.
That's not a hypothetical anymore. Since September 2025, a presidential proclamation has layered a $100,000 supplemental fee onto certain new H-1B petitions, on top of the government filing fees, attorney costs, and lottery odds that already made the visa a gauntlet for small employers. The rule has been challenged in court, partially struck down, and then reinstated while an appeal plays out — which means small business owners are trying to make hiring decisions in the middle of active litigation.
Here's what the fee actually covers, who it applies to, what a realistic all-in H-1B budget looks like for a small employer in 2026, and which alternatives are worth exploring if $100,000 is simply not in the budget.
What the $100,000 Fee Actually Is
In September 2025, the White House issued a proclamation restricting entry for H-1B specialty occupation workers unless their petition is "accompanied or supplemented" by a $100,000 payment. The restriction took effect at 12:01 a.m. Eastern on September 21, 2025, and was originally set to run for 12 months unless extended.
The fee is not a general tax on every H-1B worker in the country. It targets a specific slice of filings:
- It applies to new H-1B petitions filed after the effective date where the worker will obtain their visa through consular processing — meaning they're outside the US and need a visa stamp at a US consulate before entering.
- It does not apply to H-1B petitions filed before September 21, 2025; H-1B renewals or extensions with the same employer for someone already in the US in H-1B status; changes of status, amendments, or extensions of stay approved for beneficiaries already inside the country; or visa stamp applications tied to a petition filed before the cutoff date.
- A national interest exception exists: the Department of Homeland Security can exempt an individual, a company's entire workforce, or an entire industry if it determines the hiring is in the national interest and doesn't threaten US security or welfare.
In plain terms: if you're sponsoring someone who is already living and working in the US on an H-1B, or you're simply renewing or transferring an existing H-1B employee, this fee generally does not apply to you. Where it bites hardest is the classic small-business scenario — hiring a candidate abroad, or a recent international graduate who needs to leave the country and re-enter on a new visa stamp.
The Legal Status Is Genuinely Unsettled
This is the part that makes 2026 hiring plans hard to pin down. On June 8, 2026, a federal judge in the District of Massachusetts ruled that the $100,000 fee was unlawful, siding with a coalition of state attorneys general who argued the administration exceeded its authority under the Immigration and Nationality Act and the Administrative Procedure Act — that a fee of this size is a tax, and only Congress can impose one.
But the story didn't end there. The same court then temporarily paused its own ruling to give the government time to seek a stay from the First Circuit Court of Appeals. As of this writing, USCIS is still requiring the $100,000 fee for petitions that are approvable only through consular processing, while the appeal works its way through the courts.
What this means practically: don't assume the fee is dead, and don't assume it's permanent. If you're mid-hiring-process, check the USCIS H-1B FAQ page and your immigration counsel immediately before your candidate travels or files, since the rules can shift with a single appellate order.
What an H-1B Actually Costs a Small Employer in 2026
Strip out the $100,000 fee for a moment and look at the baseline cost of sponsoring an H-1B as a small employer (generally defined as fewer than 26 full-time employees for fee-reduction purposes):
| Cost item | Approximate amount |
|---|---|
| H-1B registration fee (per candidate, at lottery entry) | $215 |
| I-129 base filing fee | $460 |
| ACWIA training fee (small employer rate) | $750 |
| Fraud prevention and detection fee | $500 |
| Asylum program fee | $300 |
| Government fees subtotal | ~$2,225 |
| Attorney fees (typical range) | $3,000–$5,000 |
| Premium processing (optional, 15-day decision) | $2,965 |
| All-in cost, no $100,000 fee | ~$5,500–$10,500 |
That's the "normal" H-1B budget — the one that applied for years before the 2025 proclamation, and the one that still applies if your candidate is exempt from the supplemental fee. It's a meaningful cost for a small business, but a plannable one.
Add the $100,000 fee for a consular-processing case, and the math changes entirely: a single hire can run $105,000–$110,000 before salary, benefits, or onboarding costs enter the picture. For a five- or ten-person company, that's often more than the cost of the hire's first full year of compensation.
Three Things Small Employers Get Wrong About the Fee
1. Assuming it applies to everyone with an H-1B. The fee is specifically tied to new consular-processing petitions filed after the effective date. An existing employee renewing their H-1B, or someone changing status from an F-1 student visa while already in the US, is generally not subject to it. Don't walk away from a candidate before confirming their specific case posture with counsel.
2. Treating the lottery odds as a footnote. The H-1B cap registration for fiscal year 2026-27 ran from March 4 through March 19, 2026, with selection now weighted by wage level — Level IV wage offers get four lottery entries, Level III gets three, Level II gets two, and Level I gets one. DHS estimated selection odds ranging from roughly 61% at the top wage level down to about 15% at the bottom. Most small businesses, which can't always offer top-of-market wages for a role, land disproportionately in the lower wage tiers with correspondingly worse odds — meaning you can budget the fee, win the lottery, and still be filing a $100,000+ petition for a role you're not certain is worth that wage tier in the first place.
3. Not budgeting the fee as a real line item. Whether or not the litigation ultimately kills the fee, the practical reality for 2026 hiring plans is that it's currently being enforced. If international hiring is part of your growth plan, it needs its own budget line — not a surprise absorbed into legal or payroll costs after an offer is already out.
Alternatives Worth Exploring First
If $100,000 makes a hire uneconomical, a few paths are worth checking before walking away from a strong candidate:
- TN visas for Canadian and Mexican professionals in qualifying occupations avoid H-1B fees, the lottery, and the $100,000 charge entirely — candidates can often apply at a port of entry and start work within days. This is frequently the fastest and cheapest option when it applies.
- O-1 visas for candidates with extraordinary ability in their field have no annual cap and aren't subject to the $100,000 fee, though the evidentiary bar (publications, awards, media coverage, high compensation) is genuinely high.
- L-1 intracompany transfers work if the candidate has spent at least one of the last three years working for a related company abroad — useful for hiring through an existing international contact rather than cold-market recruiting.
- Employer-of-record (EOR) arrangements let a small business employ someone abroad through a local EOR entity, paying that country's payroll and compliance costs instead of US visa fees — a common workaround when the role doesn't require physical US presence.
- Petitions filed before the H-1B is needed for a consular stamp, or hiring candidates already inside the US on H-1B status from another employer, sidestep the fee's specific trigger conditions.
None of these are drop-in replacements for every H-1B case, but running the numbers on all of them before committing $100,000 to a single hire is worth the hour it takes.
Track the Real Cost of Every Hire
Whichever path you take — paying the fee, pursuing an alternative visa, or structuring an EOR arrangement — the actual cost of an international hire rarely lands where the initial budget said it would. Government fees change mid-cycle, attorney invoices arrive late, and litigation like this year's can add or remove six figures from a single filing with a week's notice.
Recording these costs in a system you fully control, rather than buried in a generic "legal fees" bucket, makes it possible to actually see what an international hire costs versus a domestic one. Beancount.io offers plain-text accounting that gives you complete transparency over categories like immigration and legal spend, with full version history so you can track exactly when a cost changed and why. Get started for free and see why developers and finance-savvy business owners are switching to plain-text accounting.