H-1B Visa Fees and the Cost of Hiring Foreign Software Engineers in 2026

Key Takeaways for Tech Leaders

• Organizations must now pay a $100,000 fee for new H-1B visa applications, which allow foreign nationals to work in the US in specialty roles.
• Many tech companies rely on the H-1B visa program to source specialized international talent, and the new fee is unaffordable.
• As an alternative to the H-1B visa program, organizations can use tech talent marketplaces like Terminal, partner with outsourcing companies, or upskill current employees or local talent.
• Popular regions for finding top software developers are Latin America, Europe, Canada, and Asia.
• When working with engineers outside of the US, businesses should account for issues like compliance, cultural and linguistic alignment, tenure and model, and vetting process.
• Organizations should consider working with recruiters that provide employer of record (EOR) services, such as Terminal, in order to more easily navigate complex labor laws in other countries. 

Introduction: Disruptions on the Tech Hiring Horizon Due to a New H-1B Visa Fee

On September 19, 2025, the White House shook the STEM world with the news that employers would incur a staggering $100,000 fee on all new H-1B visa applications. Because many tech companies rely on foreign nationals and apply for these visas to fill niche positions, they must either pay this steep fee or look for alternatives. If you’re a tech leader, there are still ways of working with skilled international software developers, such as by outsourcing or using talent marketplaces.

In any case, businesses will have to reconceptualize what tech hiring looks like.

What Is the H-1B Visa Program and Why Does It Matter For Tech?

The H-1B program allows organizations to hire foreign nationals for specialty roles. Usually, H-1B occupations are STEM-related and require a bachelor’s degree in a specialty field like computer science at a minimum.

The H-1B visa program had long been a means of hiring highly skilled non-U.S. citizens to work in the country. Many employers relied on the program for hard-to-find talent and skill sets not available locally. Previously, fees had ranged from $2,000 to $5,000. So, a six-figure price tag came as an enormous blow to many employers.

Established in 1990 during a comprehensive update to US immigration law, it is part of a larger visa program that encompasses different types of visas, such as:

• Employment-based (EB) immigrant visa: Grants permanent residency (green card) pathways for artists, scientists, and other professionals
• H-2A visa: Enables agricultural employers to bring in foreign nationals for seasonal agriculture-related jobs when there is a shortage of US workers

The program targets highly skilled professionals, contrasting with visa programs focusing on other occupations, such as agriculture, and has been responsible for tens of thousands of visas every year. Usually, the length of the visa is three years, and it may be extended to up to six years. Employers must demonstrate that the role demands specialized skills to sponsor these applications.

The H-1B Visa Reform Act of 2004 saw significant changes to the program, resulting in a maximum annual cap of 65,000 H-1B approvals for new employees and another 20,000 reserved for foreign professionals who have advanced degrees from colleges and universities in the US. Renewal applications and some employers, such as nonprofits, colleges and universities, and government research institutions, are exempted from this limit.

H-1B visa application approvals hit a peak in 2022, with 442,425 approvals, according to Pew Research Center. Denial rates also dropped to 2% that year, the lowest percentage since 2009. In 2024, approximately 400,000 applications were approved. Meanwhile, denial rates reached a high in 2018—15%—under the Trump administration’s stricter immigration policies. 

The demand for H-1B visas extends far beyond the cap of 85,000 approvals. US Citizenship and Immigration Services (USCIS) holds a lottery to select applicants.

Perhaps no sector was as affected by the announcement of the fee as tech. In 2024, 65% of H-1B visa recipients worked in tech-related occupations. Big tech and Fortune 500 companies, in particular, have come to rely on foreign talent for niche skills and credentials. But for many, that’s no longer an option.

What Are the 2025 Changes to H-1B Visas?

New changes to the H-1B visa program are the $100,000 visa application fee and the prioritization of senior-level professionals as opposed to junior or entry-level professionals by weighting them more heavily in the lottery.

In September 2025, the White House issued a statement regarding the imposition of the new fee, which went into effect on September 21, 2025. In it, the Trump administration claimed that the program “has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor. The large-scale replacement of American workers through systemic abuse of the program has undermined both our economic and national security.”

These conclusions have been heavily disputed. For example, the National Bureau of Economic Research has found that while the program may have contributed to less-rapid growth in college enrollment in computer science, the associated reduction in labor costs has “spurred growth and innovation in the computer science sector and increased productivity in the economy as a whole.”

NBER’s research also concluded that profits have increased and prompted new organizations to enter the field, as well as ignited growth in related fields and raised wages for non-computer-science college graduates and non-college graduates. Moreover, the program has spurred greater innovation in the US.

Because so many tech companies, academic institutions, government programs, and other entities have long been relying on the H-1B visa program, the $100,000 fee imposition is a disruption to this hiring model.

While this is a one-time application fee and doesn’t apply to renewals, it represents a huge leap from the former fee of $215 and makes hiring foreign engineers prohibitively expensive for many organizations. 

The $100,000 fee isn’t the only change to the H-1B visa program. Unfortunately for tech organizations and recent graduates, the Trump Administration has also created a new rule, set to take effect in February 2026, that prioritizes senior-level professionals. Approximately 70% of full-time graduate students in fields related to AI are international. Many tech companies heavily recruit from this pool and secure H-1B visas for them. 

But according to the rule, the lottery will favor professionals in roles requiring more experience, weighting them by salary levels. Candidates are assigned a level from 1-4, with Level IV generally representing those with management or supervisory duties. Under the new rule, the chances of a Level IV professional being selected are increasing by 107% and decreasing for a Level I professional by 48%.

This is also a blow to organizations with smaller budgets—those who aren’t necessarily in a position to incur the expense of hiring senior software developers because it’s prohibitively expensive.

Big Tech and the H-1B Visa Program

Big tech is facing a huge hurdle with these program changes. For example, Amazon has been the single company with the most workers approved through the H-1B visa program, according to Pew Research, accounting for nearly 32,000 visas. Other tech giants comprising the top eight recipients include Tata Consultancy, Infosys, Google, Microsoft, Meta, Apple, and Cognizant Technology.

While 30 big tech employers receive roughly 40% of new H-1B visas, startups and SMBs will be hard hit as well.

“If you’re a startup with new technology, and you’ve got some venture capital money but you’re worried about burning through it too quickly, this could kill you,” said John Skrentny, a professor at the University of California, San Diego, who studies STEM workforce development.

This is prompting many to turn to offshore markets, in direct opposition to the supposed intended outcome: benefiting American workers. 

In December 2025, big tech companies like Apple and Google urged visa-holder employees to avoid traveling outside the US due to increased vetting and lengthy delays in returning to the country, propelled by fears that foreign workers could be “stranded for months,” according to NPR.org. Meanwhile, Google’s Alphabet Workers’ Union has been seeking protection for H-1B visa holders, whose legal status could be at risk if Google begins layoffs.

What Challenges Do the New H-1B Visa Fees Create for Tech Companies?

The new H-1B visa fee creates challenges, including impractical costs for small businesses, the unavailability of niche skills, and an inability to collaborate face-to-face.

Impractical for SMEs and Startups

While large enterprises may be able to accommodate the fee, smaller and emerging businesses usually can’t.

Speaking on artificial intelligence businesses in particular, Jeremy Neufeld, director of immigration policy at the Institute for Progress, noted, “If you zero in on the leading AI startups, the data are striking: 60 percent of the top AI startups had an immigrant founder and 70 percent of those first came to the US on student visas before launching their companies. The US talent pipeline is heavily reliant on students, and these moves stand to throttle it.”

This is true across startups and SMBs, who are unable to absorb this huge fee, as big tech companies may. If they are unable to access top international tech talent, they could very well be at an enormous disadvantage. Often, these companies already face difficult funding rounds.

Unavailability of Local Niche Talent and Skills

Many startups and long-established enterprises need specialized skills to build up their platforms, ones that aren’t always accessible in the US. The US is already facing a shortage of necessary tech skills. This will be compounded by the fee.

Formerly in-demand skills are becoming less relevant, while cutting-edge and niche skills are more important than ever. For example, Deloitte reports that job postings in the US that require GenAI skills have grown by over 1,800%. It will be increasingly difficult for organizations to meet their goals and deliver value to consumers without these critical skills.

Inability to Collaborate Face-to-Face

Face-to-face communication is often essential when you have a team working on complex projects. Bringing in foreign nationals makes it possible to collaborate in person. While you can still connect with overseas engineers living and working in their home countries, time zone misalignment, particularly in regions on the other side of the world like Asia, makes this difficult.

Nearshore developers like those in Latin America, which has overlapping business hours with US businesses, may be more appealing.

Where and How Can Companies Recruit Software Engineers?

To cope with the new H-1B visa fee, companies can use marketplaces, outsource operations to nearshore or offshore locations, or upskill local workers or current employees.

Marketplaces 

Think of marketplaces as the best of both worlds. You get the benefit of working with international talent without having to incur steep fees, like those you would have to pay when bringing in foreign workers via the H-1B program.

Marketplaces like Terminal vet software engineers and other tech talent and act as an intermediary, presenting you with candidates to hire as contractors or full-time workers. 

Terminal, for example, connects engineers in Latin America, Canada, and Europe with businesses in the US and beyond. It ensures skills quality, including only the top 7% of tech talent in its platform, and gives employers a shortlist of pre-vetted candidates that a good fit for their requirements and company culture. This accelerates the often-lengthy hiring process and costs far less than full-time, onshore hiring.

Some marketplaces, including Terminal, also offer the option of being the employer of record (EOR). This can help organizations enormously because international compliance and employment legalities are complex and difficult to navigate. Acting as the EOR, the marketplace handles matters such as payroll, benefits, compliance, taxes, and other admin.

Nearshore or Offshore Outsourcing

Outsourcing has become an increasingly popular option, particularly for short-term assignments or projects. It involves partnering with an external company to accelerate software development or complete full-scale projects. Typically, arrangements involve staff augmentation—adding team members from the external company—or teams—offloading entire projects to a fully functional external team.

Nearshore vs. Offshore vs. Onshore Outsourcing

Businesses can choose among onshore (developers in the same country), nearshore (developers in nearby regions like Latin America), or offshore (developers in distant countries) models. 

Onshore is the most expensive, and offshore is typically the least expensive. Nearshore is often seen as the best of both worlds because it allows organizations to curb costs while still accessing top talent and working in the same or a similar time zone, improving communication and collaboration.

Marketplaces vs. Outsourcing

Marketplaces like Terminal differ from outsourcing firms because they give you complete oversight over employees. While outsourcing does have many benefits, one disadvantage is that organizations don’t have full management over their developers. Moreover, because these engineers aren’t employees, there can be the risk of frequent turnover. And some outsourcing companies have minimum contract lengths, which can be burdensome.

Upskilling Current Employees or Local Workers

Some businesses are considering upskilling current or onshore workers instead of facing the steep costs associated with the H-1B visa. One advantage is that this strategy reduces an organization’s dependence on foreign talent.

However, this strategy can strain resources and end up introducing yet another financial burden. Organizations would need to invest in training, mentorship, or apprenticeship programs, which are often expensive. Moreover, productivity takes a hit as employees get up to speed. It can also mean that current employees aren’t able to complete all of their regular responsibilities while they’re in the process of upskilling.

This solution also leads to less diversity, which is necessary for innovation and critical to software development. There could also be a dearth of niche talent available domestically or locally. 

When Should Businesses Use Marketplaces vs. Outsourcing vs. Upskilling Employees?

Use marketplaces like Terminal when:

• You’re looking for specialized talent for short or long-term roles.
• You want your hire to be a regular employee.
• You want to retain management and oversight over your software developers.
• You’re eager to hire international engineers but don’t want the hassle of navigating complex labor laws in other countries.

Use outsourcing when:

• You have non-core roles to fill.
• You need extra hands on deck.
• You have short-term projects or needs.
• Your software development needs are urgent.

Use upskilling when:

• You have the time and resources to train employees.
• You want to address skills gaps in-house.
• Expanding internationally is not a central goal.
• Your focus is on employee retention and loyalty.

What Are the Best Regions for International Tech Hiring?

The top regions for sourcing internal tech talent are Latin America, Europe, Canada, and Asia.

Latin America

Latin America has steadily become a hotspot for software engineering talent over the past few decades. Its geographic proximity and time zone alignment with the United States make it an attractive nearshore destination.

Overlapping business hours and strong English proficiency allow businesses to collaborate and communicate with software developers in the region in real-time.

Consider Mexico. Not only is it one of the two countries that share a land border with the US, but it also has cultural similarities, along with a rapidly growing pool of tech talent. In 2023, the country boasted 220,000 engineers. Investments in STEM education and a thriving tech ecosystem are not unique to Mexico—many other countries in the region are investing heavily in tech initiatives and learning as well.

Europe

With a large pool of tech talent, cultural similarities to the US, and a high level of English proficiency, several countries in Europe are attractive destinations to find software engineers. Both Eastern and Western Europe offer lower costs combined with strong skill sets and well-known tech hubs across countries like Spain, Romania, Ukraine, and Poland.

Poland, for instance, has the highest number of software engineers in CEE, with hundreds of thousands of developers. The country ranks high in the National Cyber Security Index at no. 10, with neighbors Romania at no. 8 and Hungary at no. 8. With a mature digital infrastructure, specialized and niche skills, and cost-effectiveness, Poland is a strong destination for sourcing software developers.

Canada

Closest to the US in terms of culture—as well as geographic proximity, along with Mexico—Canada offers a booming tech scene. Home to tech giants and startups alike (Shopify, CGI, and Hootsuite, to name a few), Canada is time zone aligned with the US, and English is one of the country’s two official languages.

The government invests heavily in cultivating tech talent through initiatives like the Tech Talent Strategy, which began in 2023. Its highly educated workforce, cost-effectiveness, and enormous talent pool also make Canada’s software developers highly sought-after. The country is economically stable as well, making it a less risky source of top tech talent. 

Asia

Asia has long been a key destination for outsourcing software development. In terms of cost, it’s a clear winner: It’s usually the least expensive location.

But despite the low price tag, there are some important drawbacks to consider. Because Asia is an offshore market, it shares zero overlapping business hours with the US, meaning you can’t communicate synchronously. English proficiency also tends to be lower than in alternatives like Latin America, Europe, and Canada.

Moreover, markets like India are known for high developer turnover, quality discrepancies, and economic and political instability. Another noteworthy disadvantage is a lack of cultural alignment, which can lead to miscommunication and misunderstandings and result in lengthened timelines and hidden costs. 

Where Should Organizations Hire Software Engineers?

Hire from Latin America if:

• You want to work with developers in real-time.
• You prioritize cultural and linguistic alignment for seamless communication.
• You want to have the option of meeting with engineers in person.
• Curbing costs is essential.

Hire from Europe if:

• A mature, digital infrastructure is important.
• Collaborating in real-time is less important, but you still want some overlap in business hours to troubleshoot and resolve problems.
• You’re looking for a high degree of specialization.
• Cybersecurity and compliance are critical.

Hire from Canada if:

• Close cultural and linguistic compatibility is important.
• You want the possibility of in-person meetings.
• You’re trying to curb risks.

Hire from Asia if:

• Keeping costs low is the most important factor.
• You want to embrace the “follow-the-sun” model and have constant coverage.
• Real-time collaboration and communication aren’t essential.

What Should Organizations Think About When Hiring Abroad?

Compliance

When working with software developers abroad, compliance is an important concern. You must take into account the local employment laws and regulations. Often, this is challenging, given that every country has unique labor laws.

When considering your options, note whether prospective partners offer employer of record services as Terminal does. EOR services help you navigate complex international labor laws and take the administrative burden off your plate, saving you time and money.

Cultural and Linguistic Alignment

Look for strong cultural alignment, including similar business and working styles. English proficiency is essential for frictionless communication, too. Alignment in all senses improves productivity and team dynamics. As part of your hiring process, assess international candidates for English proficiency and soft skills in addition to technical competencies.

Tenure and Model

You may be in search of individual contractors, full-time developers, or dedicated teams. There is no definitive correct choice. Weigh the pros and cons of each model based on your requirements and preferences. Consider arrangements and models that offer flexibility if you believe your needs may change. For example, look for organizations that offer contract-to-hire options if you think you might want to convert a freelancer to a full-time hire.

Vetting Process

You want to work with an organization that is transparent about its vetting process for developers. How do they evaluate candidates? How many do they accept? Look for prospective partners that assess technical skills, as well as soft skills and fit with potential clients.

Conclusion: Looking Ahead in Tech Talent Hiring

Many organizations across industries have come to rely on international talent and will continue to do so long into the future. This is particularly true for tech, which disproportionately leverages foreign nationals for their specialized and niche skills.

Now, a proposal for a new bill to eliminate the H-1B program altogether has come into play. Whether this has any merit remains to be seen. However, there is no doubt that the changes to the program are already coming as a setback to many organizations.

But that doesn’t mean that hiring internationally is impossible or even difficult. Organizations in need of tech talent have several options that allow them to source specialized software developers, including looking at marketplaces or outsourcing. If you want to accelerate hiring, find niche skills, and save on costs, look no further than Terminal. We hire only the top 7% of talent to ensure you find the best skills and the best fit.

Browse software engineers in Latin America, Europe, and Canada.