The $100,000 H-1B Toll: America’s New Talent Tax
A one-year policy that tells companies: pay up, reroute, or ship the future abroad
Quick explainer
What is H-1B? A U.S. work visa for highly skilled jobs (software engineers, chip designers, researchers).
What just changed? For any new H-1B filed on or after Sept 21, 2025, the government now requires a one-time $100,000 payment with that petition. Renewals of existing visas are not charged.
How long does this last? The order runs 12 months unless extended.
Can anyone skip the $100k? Yes. DHS can grant a “national-interest” waiver for certain people, companies, or industries.
What just happened
On Sept 19, the White House issued a proclamation: every new H-1B petition must include a $100,000 payment. This isn’t a filing fee — it’s a toll on entry.
Markets reacted immediately. Indian IT stocks fell. Several big employers told H-1B staff to avoid non-essential travel. India’s foreign ministry warned of family disruption if cases get delayed.
Founder voices came back into focus. Elon Musk has said bluntly that H-1B is why he and many of the people who built modern tech could work in the U.S. He once vowed to “go to war” over restricting it. Translation: tech leaders see this as an attack on the talent pipeline, not just a paperwork tweak.
The political rationale
The administration’s message is blunt: companies kept bringing in H-1B workers while laying off Americans.
The White House fact sheet led with a killer number: H-1B holders now make up 65% of the U.S. IT workforce, up from 32% in 2003.
Then came the examples:
One company laid off 27,000 U.S. employees since 2022 while receiving 25,075 new H-1Bs.
Another got 5,189 H-1Bs in FY2025 while cutting 16,000 U.S. jobs.
A third received 1,698 H-1Bs while announcing 2,400 layoffs in Oregon.
The punchline: unemployment among recent U.S. computer-science grads rose from 6.1% to 7.5% while companies kept filing H-1Bs.
Plain English: the White House is pitching the $100k toll as a reset button. Hire globally if you must, but pay a premium. If not, hire locally.
The legal and strategic angle
Can a president do this? Yes. Presidents have broad power to restrict who can enter the U.S.
What’s unusual? Attaching a $100,000 payment. Normally, fees are set through rulemaking. Expect lawsuits arguing this “fee” is not authorized that way.
Business reality: Until a court says otherwise, assume the toll applies to every new H-1B, unless a waiver is granted.
The math that matters
A typical U.S. software developer earns about $133,000. With benefits, call it $166,000 a year.
Add the toll, spread over three years, and the cost rises to about $199,000 a year.
That’s an extra $33,000 per year, or roughly a 20% increase.
At company scale:
Mega-cap example: 3,500 new H-1Bs = $350 million in tolls. If half are waived, that’s $175 million. For firms earning $60–110 billion, this is about half of one percent of profits — affordable, but not for every role.
Mid-size software company: 20 new H-1Bs = $2 million. On $40 million in profit, that’s 5% gone.
IT services provider: 1,000 new H-1Bs = $100 million. On $1 billion in profit, that’s 10% wiped out. Expect offshore hiring to accelerate.
Startups: $2 million in tolls can equal six months of runway. Most will only pay for one irreplaceable hire and move everything else to other visas or distributed teams abroad.
The waiver wildcard
The proclamation lets DHS grant national-interest waivers for people, companies, or industries.
If AI, semiconductors, and defense get waivers, the toll is a scalpel.
If not, companies will shift roles to Canada, Mexico, or India.
Action item: For each new role, run three lanes:
Pay/waive for mission-critical.
Alternate visa (O-1, L-1, TN, E-3).
Relocate offshore or near-shore.
Global competition for the same talent
If the U.S. slows H-1B entry, other countries are ready:
Canada: Indians got nearly half of all skilled-migration slots in 2023; over half in STEM draws.
European Union (Germany): Indians received about one-quarter of EU Blue Cards; Germany issued most.
United Kingdom: Indians remain the largest nationality on Skilled Worker visas, even after a clampdown.
Australia: India led skilled migration in 2022–23 with over 36,000 slots.
UAE: Dubai issued about 158,000 Golden Visas in 2023, many targeting professionals.
Plain English: If America taxes new H-1Bs, Canada, Germany, the UK, Australia, and the UAE will happily take the same engineers and founders. The work gets done — just not here.
Follow the money
Big Tech vs. startups
For a mega-cap, $350 million is a few days of revenue. They’ll pay for frontier hires and reroute the rest.
For a startup, $2 million is six months of life. They’ll avoid the toll except for a single company-changing hire.
Runway reality
A startup with $20 million raised and a $3 million monthly burn has 7 months of runway. Add $2 million in tolls and that drops to 6 months — with no acceleration in output.
Local wages vs. the toll
If fewer H-1Bs arrive in hubs like Seattle or the Bay Area, salaries rise. A 10% bump on a $166,000 loaded cost = $16,000 more per engineer per year. For 1,000 engineers, that’s $16 million — about half the cost of paying the toll for 500 H-1Bs.
Capital tradeoffs
Every dollar spent on tolls is a dollar not spent on R&D, hiring, or launches. For giants, it’s noise. For mid-size firms, it cancels a product. For IT services, it drives margins into single digits.
The bigger business picture
This won’t stop the AI boom. It will decide where the boom happens.
Big Tech will pay selectively.
Startups will default distributed.
Indian IT loses margin now but gains long-term talent density.
U.S. competitiveness depends on waiver breadth and whether America still wants to be the default home for global talent.
What to watch
Court challenges over whether a president can attach a $100k “fee.”
DHS waiver criteria — narrow vs. broad carve-outs.
Company earnings calls quantifying immigration costs.
Visa substitution: more O-1, L-1, TN, E-3; fewer H-1Bs.
Talent flows: more Indian engineers choosing Canada, Germany, the UK, Australia, UAE.
The takeaway
This is a talent tax. It adds about $33,000 per year to each new H-1B hire’s cost.
Pay the toll for mission-critical roles.
Reroute when another visa fits.
Relocate when neither works.
Politically, the White House frames this as protecting U.S. jobs. Founders counter that H-1B built modern tech. Both can be true.
The difference is strategy. If waivers are broad, this toll is noise. If not, the U.S. is sending the next wave of AI builders a clear message: build here if you can afford the tax — or build the future somewhere else.
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