$100,000 H-1B visa fee may have cost Trump govt $20 million as filings drop

A study says fewer H-1B filings after the $100,000 fee may have cut US visa fee collections by about $28 million despite generating $8.5 million in payments

In one of the toughest measures taken against skilled foreign workers during a wider immigration crackdown, the administration of Donald Trump last September imposed a one-time $100,000 fee on certain H-1B visa petitions. But months after the rule came into effect, early numbers suggest the policy may have reduced visa filings enough to cut government fee collections, with revenue from some H-1B applications abroad falling by about $28 million.

 

Figures shared by Institute for Progress fellow Connor O’Brien illustrate how limited the uptake has been so far.

 

“85 people have paid the $100,000 H-1B fee so far, totaling $8.5 million in revenue. But fee revenue from H-1B apps abroad is down $28 million,” O’Brien wrote in a post on X.

   

The numbers have drawn attention as economists and policymakers assess whether the high visa charge is changing how companies hire foreign workers. 

 

What the study examined

 

The research paper titled The H-1B Wage Gap, Visa Fees, and Employer Demand, published as a working paper by the National Bureau of Economic Research, analysed how introducing a large visa fee, including the $100,000 charge, could influence employer demand for foreign workers, hiring patterns and the wider US economy.

 

Borjas examined administrative data from H-1B petitions filed through Form I-129, Labour Condition Applications submitted by employers and demographic data from the American Community Survey.

 

His analysis showed that the number of H-1B petitions requesting consular notification, visas issued abroad and not subject to the annual cap, fell during the period September 21, 2025 to February 15, 2026, compared with the same period a year earlier.

 

“Because fewer such petitions were filed, US Citizenship and Immigration Services collected about $28 million less in fees,” Borjas wrote. 

 

Comparing the loss with proclamation payments

 

Borjas compared that decline with revenue collected under a separate presidential proclamation payment linked to visa restrictions.

 

During the same period, proclamation payments generated about $8.5 million.

 

According to the study, the fall in certain H-1B filings therefore cost the government more in lost visa fees than it collected from the new payment requirement.

 

Wage gap between H-1B and US workers

 

The research also examined wage patterns between foreign and domestic workers.

 

By comparing employees with similar education, age, occupation, gender and location, the study found that H-1B workers are paid about 16 per cent less than comparable US-born employees.

 

Since the average salary in the sample exceeds $100,000 a year and the visa can last up to six years, the wage difference produces large payroll savings for employers.

 

Over the full visa period, the study estimates that companies save close to $100,000 in labour costs per worker compared with hiring an equivalent American employee.

 

Researchers say this cost difference helps explain why many firms continue sponsoring H-1B professionals despite regulatory and administrative costs. 

 

$100,000 fee as policy option

 

Building on these findings, the study also explores a policy scenario where employers would pay a one-time fee when a worker first receives H-1B status.

 

The paper discussed proposals in US policy debates suggesting a $100,000 fee for new visas in future lottery cycles.

 

To analyse the possible effects, Borjas developed a labour demand model examining how firms choose between domestic and foreign workers, taking into account wages, productivity differences and visa costs.

 

According to the model, employer demand for H-1B workers may remain strong even if visa fees increase.

 

The simulations suggest that fees between about $150,000 and $200,000 could be introduced without greatly reducing employer demand.

 

Two features of the programme help explain this pattern:

 

• The wage gap lowers the overall cost of employing foreign professionals

• The annual cap of 85,000 visas is heavily oversubscribed

 

Because many more employers apply than visas available, companies compete intensely for limited slots and may still be willing to pay large fees.

 

Higher fees could change the type of workers hired

 

The research also suggested that higher visa costs could alter the skill composition of workers entering the programme.

 

If employers face a large upfront cost, they may prefer candidates whose productivity justifies that expense.

 

Under such a system, the programme could gradually shift toward more highly skilled professionals while reducing applications from lower-paid positions.

 

Possibility of offshoring some work

 

The study also modelled whether firms might move some tasks overseas if visa costs rise sharply.

 

Companies could relocate certain functions performed by H-1B workers to offshore teams in lower-cost countries.

 

Even in that scenario, however, the research indicates many firms may still prefer to hire specialised talent within the United States rather than move entire operations abroad.

 

Differences between companies

 

The study also compared wage gaps across employers.

 

Large American technology firms, including Amazon, Google, Microsoft, Meta Platforms, Apple and Tesla, show relatively small wage gaps for H-1B workers.

 

At Meta and Tesla, for example, the wage difference ranges between about 1 per cent and 3 per cent, which researchers say is statistically close to zero.

 

By contrast, outsourcing firms frequently associated with H-1B recruitment pipelines, such as Infosys, Tata Consultancy Services, Wipro and HCL Technologies, show much larger wage gaps.

 

The wage difference at HCL and Tech Mahindra exceeds −30 per cent, according to the analysis.

 

Most H-1B workers are not concentrated in large firms

 

The data also show that H-1B workers are spread across a large number of employers.

 

Nearly 75 per cent of hires occur outside the top 25 companies.

 

Form I-129 filings show that 46,184 distinct firms hired at least one H-1B worker during the four-year period analysed.

 

The median employer hired exactly one H-1B worker during that time, while firms at the 75th percentile hired three.

 

Borjas therefore wrote that the lower average pay of H-1B workers cannot be explained solely by the practices of large outsourcing companies.

 

Earlier claims about job creation

 

The debate over the programme has existed for years.

 

Testifying before Congress in 2008, Bill Gates said hiring foreign professionals could expand employment within companies.

 

“Microsoft has found that for every H-1B hire we make, we add on average four additional employees to support them in various capacities,” Gates told lawmakers. But critics of the programme claim otherwise.

 

Legal challenges to the $100,000 fee

 

Separate legal disputes are also under way over the legality of the $100,000 charge.

 

Bloomberg Law reported last week, quoting government attorney, that only a small number of employers have paid the fee for H-1B workers applying from outside the United States since it was imposed through a White House proclamation.

 

Government lawyers and plaintiffs, including a nurse recruiting firm, argued in court in Oakland over whether the fee is lawful. The case is being heard in the US District Court for the Northern District of California.

 

Department of Justice attorney Tiberius Davis argued that the small number of payments shows the measure is not functioning as a tax.

 

“The small number of fee payers goes to show it’s not a tax because it’s not raising revenue,” Davis told the court, according to Bloomberg Law.

 

The Oakland hearing is the second legal challenge to the policy. A federal judge in Washington previously rejected a request for an injunction in a separate case brought by the US Chamber of Commerce.

 

That decision is now under appeal, while another lawsuit filed by California and other Democrat-led states is being heard in the US District Court for the District of Massachusetts.