DHS Proposes Additional $103,265 Fee for Certain H-1B Cap-Subject Petitions

Proposed Rule Could Significantly Increase the Cost of H-1B Cap Sponsorship

The U.S. Department of Homeland Security (DHS) has proposed a substantial new fee that could significantly affect employers seeking to sponsor foreign nationals through the annual H-1B cap process. On August 25, 2026, DHS published a Notice of Proposed Rulemaking proposing an additional $103,265 fee for certain H-1B cap-subject petitions. The proposed fee would be imposed in addition to the other government filing fees and payments applicable to an H-1B petition.

The proposal is particularly significant because its scope would extend beyond the regular H-1B cap. DHS’s proposed rule would also cover petitions filed for beneficiaries eligible for the 20,000 U.S. advanced-degree exemption, commonly referred to as the H-1B master’s cap. As a result, if the proposal were finalized substantially as written, employers sponsoring beneficiaries selected under either the regular cap or the U.S. master’s cap could face this additional financial obligation.

It is important, however, to distinguish the proposed fee from an existing filing requirement. The $103,265 fee is currently proposed and is not, by itself, an effective USCIS filing requirement. DHS must complete the applicable rulemaking process before the proposed provision can become a final regulatory requirement. Employers should therefore rely on the fees and filing instructions actually in effect on the date a petition is filed.

The Proposed $103,265 Fee

Under the proposed rule, DHS would establish an additional fee of $103,265 for each covered H-1B cap-subject petition. The proposed fee would be payable at the time of filing and would be separate from the other fees that may apply to Form I-129 and the H-1B petition process.

The proposal is specifically directed toward petitions subject to the annual H-1B numerical limitation. It is therefore not intended to establish a $103,265 charge for every H-1B petition filed with U.S. Citizenship and Immigration Services (USCIS). The proposed rule focuses on the petitions for which an employer is seeking an H-1B number through the annual cap process.

DHS estimates that approximately 85,000 cap-subject H-1B petitions could be covered each year. This figure corresponds generally to the statutory allocation of 65,000 regular H-1B numbers and an additional 20,000 numbers available to qualifying beneficiaries under the U.S. advanced-degree exemption.

Based on that projected volume, DHS estimates that the proposed fee could generate approximately $8.78 billion in annual revenue.

The U.S. Master’s Cap Would Also Be Included

A particularly important aspect of the proposal is that the additional fee would not be restricted to the regular 65,000 H-1B cap.

The H-1B statute provides an additional exemption from the regular numerical limitation for up to 20,000 beneficiaries who have earned a master’s degree or higher from a qualifying U.S. institution of higher education. This is commonly known as the U.S. master’s cap or advanced-degree exemption.

DHS’s proposal expressly includes petitions eligible for this advanced-degree exemption within the proposed fee structure. Accordingly, an employer filing a petition for a beneficiary selected under the regular cap and an employer filing a petition for a qualifying master’s-cap beneficiary would both potentially be required to pay the proposed $103,265 fee if the rule becomes final in substantially its current form.

This aspect of the proposal is particularly relevant to employers that regularly participate in the H-1B registration and selection process for U.S.-educated foreign professionals.

The Proposed Fee Would Not Generally Apply to Cap-Exempt H-1B Petitions

The proposal distinguishes between cap-subject H-1B petitions and petitions that are exempt from the annual numerical limitation.

Certain employers and organizations may qualify for statutory H-1B cap exemptions. These can include qualifying institutions of higher education, certain nonprofit organizations affiliated with or related to institutions of higher education, and qualifying nonprofit or governmental research organizations.

Where an H-1B petition properly qualifies for an applicable statutory cap exemption, the petition is not subject to the annual H-1B numerical limitation. DHS’s proposed $103,265 fee is directed at cap-subject petitions and therefore would generally not apply to a petition that is genuinely exempt from the annual cap.

The determination of cap-exempt status must nevertheless be made based on the specific facts of the petitioner, the beneficiary, the employment arrangement, and the applicable statutory and regulatory requirements. An employer should not assume that a petition is cap-exempt simply because the employer operates in the education, nonprofit, or research sector.

H-1B Transfers and Extensions Are Different From New Cap-Subject Petitions

The proposed fee should also be distinguished from the H-1B petitions commonly referred to as transfers, extensions, or amendments.

An H-1B beneficiary who has already been counted against the applicable H-1B numerical limitation may subsequently become the subject of additional H-1B petitions that are not subject to a new annual cap number. Depending on the circumstances, these petitions may involve a change of employer, extension of stay, amendment, or another action involving an existing H-1B worker.

The proposed $103,265 fee is not described as a general fee applicable to every such H-1B filing. Its proposed application is tied to H-1B petitions that are subject to the annual numerical limitation.

Therefore, it would be inaccurate to describe the proposal simply as a new $103,265 “H-1B transfer fee” or “H-1B extension fee.” The cap status of the particular petition remains a critical consideration.

Why Is DHS Proposing the Additional Fee?

DHS states that the proposed fee is intended to recover certain federal government costs associated with administering the lawful immigration system.

According to the proposed rule, the costs considered in DHS’s methodology extend beyond the adjudication of an individual H-1B petition. The proposal discusses expenses associated with immigration benefit adjudication, fraud prevention, national-security vetting, immigration systems modernization, records management, fee collection, immigration court operations, consular processing, labor standards enforcement, and coordination among federal agencies.

DHS proposes to use the revenue generated by the additional fee to help recover these identified costs. The agency’s methodology therefore considers the broader federal immigration system rather than treating the proposed fee solely as a charge for the administrative processing of one H-1B petition.

DHS’s Estimated Revenue and Proposed Allocation

DHS estimates that approximately 85,000 cap-subject petitions could be affected annually. At the proposed fee amount of $103,265 per petition, the agency estimates approximately $8.7775 billion in annual revenue.

The proposed rule also identifies an allocation of the projected revenue among several federal agencies and departments. DHS proposes approximately 34.2 percent for USCIS, 33.7 percent for the Executive Office for Immigration Review (EOIR), 13.8 percent for the Department of Labor (DOL), 11.9 percent for U.S. Immigration and Customs Enforcement (ICE), 5.5 percent for the Department of State (DOS), and 0.9 percent for U.S. Customs and Border Protection (CBP).

These percentages represent DHS’s proposed funding methodology. They should not be understood as an existing allocation of H-1B fees or as a current funding arrangement.

Potential Financial Impact on Employers

If the proposal is ultimately finalized substantially as written, the financial consequences for employers participating in the H-1B cap process could be considerable.

For example, an employer seeking to sponsor five beneficiaries through the cap process could face a proposed additional fee of $516,325, calculated at $103,265 per petition. This amount would be separate from other applicable government filing fees, attorney fees, and other case-related expenses.

This example is purely illustrative. The $516,325 figure should not be interpreted as a current government filing obligation because the underlying $103,265 fee remains a proposal at this stage.

The potential financial impact could be especially significant for small and mid-sized businesses, start-up companies, and employers seeking to sponsor multiple H-1B beneficiaries. Employers may therefore need to consider the proposed fee as part of their future immigration-budget planning if the proposal progresses toward finalization.

The Proposed $103,265 Fee Is Separate From the $100,000 H-1B Payment

The proposed fee should not be confused with the separate $100,000 H-1B payment associated with Presidential Proclamation 10973 issued in September 2025.

Although the two amounts are similar, DHS explains in the proposed rule that they arise from different legal authorities and operate through different mechanisms. The $103,265 amount is being proposed as a regulatory fee for certain cap-subject H-1B petitions, whereas the $100,000 payment arose from the separate presidential proclamation and subsequent agency implementation.

DHS also discusses litigation concerning the $100,000 payment in the proposed rule, including a June 8, 2026 federal district court decision vacating the agency guidance implementing that payment and the government’s subsequent appeal.

Accordingly, the two measures should be analyzed independently. The proposed $103,265 fee should not be characterized as simply an increase, continuation, or replacement of the separate $100,000 payment.

The Proposed Fee Is Not Yet a Current Filing Requirement

For employers and immigration professionals, the most important point is the distinction between a proposed rule and an effective regulation.

Publication of the August 25, 2026 Notice of Proposed Rulemaking does not, by itself, make the $103,265 fee immediately payable for H-1B filings. DHS must first complete the rulemaking process, including consideration of public comments, before determining whether and in what form the proposal will become final.

The public comment period is currently scheduled to remain open through September 24, 2026.

Until any final rule becomes effective, employers should continue to follow the filing fees and payment requirements that are actually applicable under the law and USCIS instructions in effect at the time of filing.

The final version of the rule could also differ from the current proposal. DHS could modify the fee, its scope, implementation provisions, or other aspects of the proposed regulation before issuing a final rule.

What Employers Should Consider

Employers preparing for future H-1B cap seasons should monitor the rulemaking process closely. In particular, employers should determine whether a prospective filing would be subject to the annual H-1B cap or qualify for an applicable exemption.

This analysis is important because the proposed $103,265 fee is tied to cap-subject H-1B petitions. It should not automatically be assumed to apply to every H-1B petition, including petitions involving workers who have already been counted against the cap or petitions that qualify for a statutory cap exemption.

Employers should also monitor any subsequent DHS or USCIS announcements concerning a final rule, its effective date, payment procedures, and any updated filing instructions.

The Proposal Would Not Change the H-1B Numerical Cap

The proposed fee should also be distinguished from the H-1B numerical limitations established by statute.

The proposal does not itself eliminate or increase the annual H-1B quota. Unless Congress changes the statutory framework, the annual allocation remains generally structured around 65,000 regular H-1B numbers and 20,000 additional numbers under the U.S. advanced-degree exemption.

The proposed $103,265 amount would therefore represent a potential financial requirement associated with covered cap-subject petitions, rather than a change to the number of H-1B visas available each year.

Practical Examples

Consider an employer whose beneficiary is selected through the regular H-1B cap. If the proposed rule becomes effective in substantially its current form, the resulting cap-subject petition would fall within the proposed fee structure.

Similarly, if a beneficiary qualifies for the U.S. master’s cap and the employer files the corresponding cap-subject petition, the proposed rule would also cover that petition. The advanced-degree exemption affects the allocation of H-1B numbers but does not, under the proposal, remove the petition from the additional-fee requirement.

By contrast, an H-1B petition filed by a qualifying cap-exempt institution for employment that satisfies the applicable statutory exemption would generally fall outside the scope of the proposed fee because the petition would not be subject to the annual numerical limitation.

Likewise, a qualifying H-1B change-of-employer petition involving a beneficiary who has already been counted against the cap would not automatically become subject to the proposed fee merely because the beneficiary changes employers. The petition’s actual cap status must be evaluated under the applicable law.

Key Takeaways

The DHS proposal represents a potentially significant development for employers that participate in the annual H-1B cap process. The proposed $103,265 additional fee would apply to covered cap-subject H-1B petitions and would also extend to petitions eligible for the U.S. advanced-degree exemption.

The proposal would not generally apply to H-1B petitions that are genuinely exempt from the annual numerical limitation. Similarly, the proposal should not be characterized as a general fee for H-1B extensions, amendments, or changes of employer where the petition is not subject to the annual cap.

DHS estimates that approximately 85,000 petitions could be subject to the proposed fee each year and projects approximately $8.78 billion in annual revenue. The agency proposes to distribute the revenue among several federal agencies to address specified immigration-related costs.

Most importantly, however, the $103,265 amount remains a proposed fee and is not currently a generally applicable H-1B filing requirement solely because DHS published the proposed rule. Employers should continue to follow the fees and payment requirements applicable to their petitions at the time of filing and should monitor the rulemaking process for any final action by DHS.

Conclusion

DHS’s August 25, 2026 proposal to establish an additional $103,265 fee for certain H-1B cap-subject petitions could substantially affect the cost of future H-1B sponsorship if finalized in its current or substantially similar form.

The proposal is particularly notable because it would encompass both beneficiaries selected under the regular H-1B cap and beneficiaries eligible for the 20,000 U.S. advanced-degree exemption. At the same time, the proposal distinguishes cap-subject petitions from H-1B petitions that are exempt from the annual numerical limitation.

For employers, the practical issue at this stage is not whether to treat the $103,265 amount as an existing filing fee, but rather to understand the proposed rule and monitor its development. The final requirements, scope, implementation procedures, and effective date will depend on the outcome of the federal rulemaking process.

Until a final rule becomes effective, employers should carefully review the actual USCIS filing requirements applicable to each H-1B petition and should not assume that the proposed $103,265 payment is presently required.