DHS Proposes $103,265 Fee on Every Cap-Subject H-1B Petition

The Department of Homeland Security (DHS) has released a proposed rule that would establish a $103,265 fee on every cap-subject H-1B petition. If implemented as-is, it would be payable at filing and charged on top of all existing fees.

The proposed rule will be published in the Federal Register on August 25, 2026, and would add a new provision to the USCIS fee schedule that applies the fee to all H-1B petitions subject to the annual cap. This includes petitions filed under the 20,000-visa advanced degree exemption for holders of U.S. master’s degrees or higher.

Cap-exempt petitions, which are filed by institutions of higher education, affiliated nonprofits, and nonprofit or governmental research organizations, would not be subject to this fee.

This proposed rule does not immediately change current H-1B fees. Before this could go into effect, DHS would have to accept and respond to public comments, amend the proposed rule, clear White House review, and publish a final rule with an effective date.

What does the proposed H-1B fee rule say?

At a high level, the rule would create a single new fee on cap-subject H-1B petitions. DHS states it will use this additional income to fund immigration-related work across six federal agencies, most of it outside USCIS.

• It adds a $103,265 fee per cap-subject H-1B petition, payable at the time of filing. It's a brand-new, standalone fee, not an increase to the existing I-129 fees.
• It applies to all cap-subject petitions, including those eligible for the advanced degree exemption. DHS states the fee would apply uniformly regardless of employer size or nonprofit status.
• It does not apply to cap-exempt petitions. DHS proposes to exclude filings by higher education institutions, affiliated nonprofits, and nonprofit or governmental research organizations, citing the same reasoning it used when it exempted those employers from the asylum program fee.
• It stacks on everything else. The fee would be charged on top of the base I-129 fee and other existing H-1B costs, including premium processing if elected.
• If the $100,000 H-1B fee established under Presidential Proclamation 10973 is revived, an employer would owe both. That scenario may be moot, though: the proclamation is set to expire Sept. 21, 2026, before this fee could take effect, unless it's extended.
• Most of the revenue generated by this proposed fee funds other agencies. DHS proposes allocating the projected $8.8 billion as follows: USCIS 34.2% ($3.0 billion), EOIR 33.7% ($2.96 billion), DOL 13.8% ($1.21 billion), ICE 11.9% ($1.05 billion), DOS 5.5% ($484 million), and CBP 0.9% ($76.2 million).
• DHS concedes a significant impact on small employers. Its own analysis estimates the rule would have a significant economic impact on 11,051 small entities (76% of the small entities that filed cap-subject petitions in FY 2025) and identifies no alternative that would reduce that burden.
• The proposed rule does not address whether the fee would be returned if a petition is denied, rejected, or withdrawn. Because the fee applies to the I-129 petition, rather than at lottery registration, it would be paid after selection.

What does the $103K fee proposal mean for H-1B applicants?

Jeff Joseph, President of Immigration Strategy at Manifest Law and President of the American Immigration Lawyers Association (AILA), says:

“This proposed rule is different from and in addition to the $100,000 proclamation fee winding its way to the Supreme Court. It will not take effect for at least 30 days (likely next year) and, even then, I expect this rule to draw challenges the moment it's finalized. Courts will have to decide whether a proposed fee this size is arbitrary and capricious, disconnected from the actual cost of adjudicating a petition, and whether DHS even has the statutory authority to set an immigration fee at this scale.”

He also points to the litigation already moving through the courts on H-1B costs. In June 2026, the U.S. District Court for the District of Massachusetts vacated the agency guidance implementing the $100,000 payment required by Proclamation 10973 in California et al. v. Mullin; the government appealed to the First Circuit, and that appeal remains pending.

“Likely litigation aside, though, the potential impact on small and mid-sized employers will be very real. For a 30-person engineering firm, a regional healthcare staffing agency, or a small manufacturer that sponsors one or two H-1B workers a year, it's not a line-item; it's a decision to stop sponsoring altogether. That's the ripple effect: it won’t just raise costs; it could price small employers out of a talent pipeline,” Joseph says.

If you’re an employer and you have questions about how the new proposed H-1B fee could impact your talent strategy, our experienced corporate immigration lawyers can help. Reach out to us at business@manifestlaw.com or request a consultation here.