DHS Proposes $103,265 H-1B Fee: What Employers Need to Know

The Department of Homeland Security (DHS) has proposed a new $103,265 fee for H-1B petitions subject to the annual H-1B cap.

In other words, the proposed fee would apply to new H-1B petitions subject to the annual H-1B lottery.

If finalized, the rule would significantly increase the cost of H-1B sponsorship for many employers. It would apply to cap-subject workers both inside and outside the United States.

The fee is not in effect today, but employers should pay attention now. A final rule could potentially be in place in time for next year's H-1B cap season.

What is the proposed $103,265 H-1B fee?

DHS is proposing an additional $103,265 government fee for all H-1B cap-subject petitions.

The fee would be paid when the employer files the H-1B petition. It would be charged on top of all other applicable government filing fees.

The proposal covers petitions subject to the regular 65,000 H-1B cap as well as the additional 20,000 H-1B numbers available for qualifying workers with U.S. advanced degrees.

For employers, the key question is whether the petition is subject to the H-1B cap. If it is, the proposed fee would apply. If the petition is cap-exempt, the proposed fee would not apply.

Who would have to pay the proposed $103,265 H-1B fee?

The proposed fee would apply to employers filing a new cap-subject H-1B petition.

It would apply regardless of whether the worker is inside or outside the United States.

• A worker changing from another nonimmigrant status to H-1B through the annual cap.
• An F-1 student moving from OPT or STEM OPT to H-1B status through the annual cap.
• A cap-subject worker who will apply for an H-1B visa at a U.S. consulate abroad.
• A petition filed under either the regular H-1B cap or U.S. advanced-degree cap.

The important point is that cap status controls, not the worker's location or method of processing.

Would the fee apply to F-1 students on OPT or STEM OPT?

Yes, if the employer files a cap-subject H-1B petition for the employee.

Many international graduates work in the United States under F-1 Optional Practical Training (OPT) or STEM OPT and later seek H-1B status through the annual cap.

If the rule is finalized as proposed, an employer filing a cap-subject H-1B petition for that employee would be subject to the $103,265 fee even if the employee is already living and working in the United States.

The proposed $103,265 fee is not an OPT or STEM OPT fee. It would be triggered by the filing of the cap-subject H-1B petition.

Is DHS also considering a $100,000 OPT fee?

Separately, there have been reports that DHS is considering a $100,000 fee related to participation in Optional Practical Training (OPT).

That proposal has not yet been made public, and it is not part of the $103,265 H-1B proposed rule discussed in this article. Until DHS releases a proposal, its exact scope, amount, timing and potential exemptions remain unknown.

Employers should treat the two developments separately: the $103,265 H-1B fee is now a public proposed rule, while the reported OPT fee remains a separate potential policy that has not yet been publicly released.

Which H-1B petitions are exempt from the proposed fee?

The proposal does not impose the $103,265 fee on every H-1B petition.

The fee would not apply to cap-exempt H-1B petitions. This includes qualifying petitions involving:

• Institutions of higher education
• Nonprofit research organizations
• Related or affiliated nonprofit entities
• Government research organizations

The fee also would not apply to extensions, amendments, changes of employer or consular petitions where the H-1B worker does not need to be counted against the cap again.

This includes many workers who have already been counted against the H-1B cap.

This distinction is important because neither consular processing nor change of status determines whether the fee applies.

A petition involving consular processing is not automatically subject to the $103,265 fee. If the worker does not need to be counted against the cap again, the proposed fee would not apply.

Likewise, requesting a change of status inside the United States does not by itself trigger the fee. The question is whether the underlying H-1B petition is cap-subject.

Does the proposed fee apply to H-1B extensions, amendments or changes of employer?

Not if the petition is exempt from the H-1B cap.

For example, an H-1B worker who was previously counted against the cap generally does not need to be counted again when an employer files an extension, amendment or change-of-employer petition.

Those petitions would not be subject to the proposed $103,265 fee as long as the worker remains exempt from being counted against the cap.

This is why the proposal should not be understood as a $103,265 fee on every H-1B filing. It targets cap-subject petitions.

How is the proposed $103,265 fee different from the $100,000 H-1B proclamation?

The two policies are separate.

The Trump administration previously imposed a $100,000 payment requirement through a presidential proclamation. That policy focused on certain H-1B workers seeking entry into the United States and took effect almost immediately.

A federal court in Massachusetts struck down the policy. The government appealed, but the First Circuit declined to put the ruling on hold while the appeal continues.

DHS expressly states that the new $103,265 proposed fee is separate from the proclamation payment and based on different legal authority.

The proposed rule turns on cap status rather than entry

The $100,000 proclamation was tied to entry for new H-1Bs into the United States.

The proposed $103,265 fee instead turns on whether the H-1B petition is cap-subject.

That makes the new proposal broader in one important respect. It would reach cap-subject workers changing status inside the United States, including many F-1 employees on OPT or STEM OPT.

But it is also narrower in another respect. A cap-exempt H-1B petition would not be subject to the proposed $103,265 fee, even if the employee will apply for an H-1B visa abroad.

DHS is using a different legal process and authority

The proclamation relied on presidential authority under INA §§ 212(f) and 215(a) to restrict entry.

For the proposed $103,265 fee, DHS is going through formal notice-and-comment rulemaking and principally relying on its statutory fee-setting authority under INA § 286.

That distinction matters. The federal court decision blocking the proclamation does not automatically resolve the legality of this proposed rule.

But the new approach does not eliminate the possibility of legal challenges.

Why is DHS proposing a $103,265 H-1B fee?

The proposed fee is not based on the cost of processing an individual H-1B petition.

Instead, DHS identified approximately $8.8 billion in costs across the federal immigration system that it proposes to recover through the fee.

DHS calculated the amount by dividing approximately $8.777 billion in costs by a projected 85,000 fee-paying cap-subject H-1B petitions each year. The result is $103,264.57, which DHS rounded to $103,265.

DHS describes the proposal as a dedicated revenue mechanism to help fund the broader federal immigration system.

Where would the H-1B fee revenue go?

The money would fund far more than H-1B processing.

Approximately 34% of the projected revenue would go to USCIS and 33% to the Executive Office for Immigration Review (EOIR), which operates the federal immigration courts. The remaining revenue would support immigration-related costs at ICE, CBP, DOL and the State Department.

The proposed funding includes immigration adjudications, fraud detection and national security vetting, immigration court operations, consular services, labor programs and enforcement, and technology modernization.

In other words, cap-subject H-1B employers would be funding costs across the broader federal immigration system, not simply the cost of adjudicating their H-1B petitions.

That is one of the most notable features of the proposal.

Why did DHS choose cap-subject H-1B employers to pay the fee?

DHS considered spreading these costs across a broader range of immigration applications and petitions.

It rejected that approach in part because DHS concluded that doing so would impose additional costs on individuals and petitioners with fewer resources.

Instead, DHS selected cap-subject H-1B petitioners.

The agency states that cap-subject H-1B petitioners are among those "most willing and able to pay" the additional fee.

DHS also relies on economic research suggesting that employers place substantial value on H-1B workers and that demand would remain high even with a fee exceeding $100,000.

That assumption is central to the proposal. DHS projects collecting the fee on 85,000 cap-subject petitions each year, generating approximately $8.8 billion annually.

The agency also acknowledges significant effects on some employers. Its regulatory analysis estimates that thousands of small entities could experience a significant economic impact from the proposed fee.

Could the proposed H-1B fee face legal challenges?

Yes. If DHS finalizes the rule, litigation is likely.

The legal arguments will not necessarily be identical to those raised against the $100,000 proclamation. DHS is using different statutory authority and proceeding through formal notice-and-comment rulemaking.

But significant legal questions remain.

One likely issue is whether DHS's statutory fee-setting authority is broad enough to require one group of H-1B employers to fund billions of dollars in costs across the broader federal immigration system.

Another is whether a $103,265 charge largely untethered to the cost of processing an individual H-1B petition functions as an unlawful tax rather than a permissible agency fee.

The proposal itself acknowledges the unusual nature of the funding approach. DHS notes that, aside from the asylum program fee, it has not previously imposed a fee on a particular immigration subpopulation to fund general USCIS costs, other DHS components, other executive agencies and programs traditionally funded through congressional appropriations.

Challenges could also focus on DHS's methodology for allocating those broader costs to cap-subject H-1B petitioners.

Ultimately, those questions may be decided by the courts if DHS finalizes the proposal.

When could the $103,265 H-1B fee take effect?

The proposed fee is not yet in effect, and there is no effective date.

The proposed rule is scheduled for publication in the Federal Register on August 25, 2026. Public comments are due September 24, 2026.

DHS must then review the comments and decide whether and how to issue a final rule. The final rule could differ from the current proposal.

That process typically takes several months.

A final rule could potentially be in place in time for next year's H-1B cap season, although the timing is uncertain.

The rule remains in draft form. Its scope, fee amount or other terms could change before DHS finalizes it. Any final rule could also face litigation that affects whether or when it takes effect.

What should employers tell leadership?

Companies may already be receiving questions about the proposed fee and its potential impact on future immigration budgets.

DHS has proposed a $103,265 fee for new H-1B petitions subject to the annual lottery. This is not a final rule, and no new fee is due today. If finalized, it could significantly increase the cost of future H-1B lottery sponsorship, including for employees already working in the U.S. We are reviewing the potential impact on our workforce and will continue to monitor the rulemaking and expected legal challenges.

What should employers tell employees?

Employees may also see headlines about a new six-figure H-1B fee without realizing that DHS has only proposed the change.

You may have seen reports about a proposed $103,265 H-1B fee for petitions subject to future H-1B lotteries. This is a proposed rule and is not currently in effect. We are monitoring the proposal closely and will share updates if anything changes.

What should employers do now?

• Identify employees who may need future cap-subject H-1B sponsorship and have not yet been counted against the cap.
• Assess potential budget exposure based on the company's typical number of annual H-1B cap filings.
• Consider the potential impact on future recruiting and workforce planning, particularly where the company recruits international students and other employees who may later require H-1B cap sponsorship.
• Consider submitting comments by September 24, 2026, particularly where the proposed fee would materially affect hiring, recruiting or business operations.
• Continue monitoring the rulemaking and expected litigation.

The $103,265 fee remains a proposed rule. Its scope, amount or other terms could change in the final rule, and any final rule could face legal challenges.

The bottom line for H-1B employers

DHS's proposed $103,265 H-1B fee would represent a major change to the economics of H-1B sponsorship.

The most important distinction is cap-subject versus cap-exempt. If finalized as proposed, the fee would apply to new cap-subject H-1B petitions regardless of whether the worker is inside or outside the United States. It would not apply to cap-exempt petitions or other H-1B filings where the worker does not need to be counted against the cap again.

The proposal is also separate from the $100,000 H-1B proclamation currently blocked in federal court.

Comments are due September 24. A final rule could potentially be issued in time to affect next year's H-1B cap season, but the timing and final terms remain uncertain.