Washington, USA: The H-1B visa program plays a vital role in bolstering the US economy by generating revenue, providing high-paying jobs, and contributing significantly to tax collections. Visa holders are active consumers, spending on housing, transportation, and more, while also creating jobs in sectors such as technology and healthcare. Their participation promotes innovation, entrepreneurship, and productivity, which further stimulates economic growth.

Beyond serving as a pathway for skilled foreign professionals, the H-1B program is a cornerstone of economic development. Revenue is generated through application fees, and the substantial salaries earned by these professionals bring economic benefits at multiple levels. The government earns millions annually from this program.

The H-1B visa has recently become a prominent topic following debates within conservative circles. President-elect Donald Trump has expressed strong support for the program, aligning with tech leader Elon Musk and Indian-American entrepreneur Vivek Ramaswamy. Their stance provides hope for many Indian professionals seeking work opportunities in the US.

“I’ve always been a supporter of H-1B visas. They’re essential, and we’ve utilized them extensively,” Trump said in an interview with the New York Post. Musk, CEO of Tesla and SpaceX, emphasized the importance of skilled immigration to address the persistent shortage of top-tier engineering talent in Silicon Valley, with Tesla securing 724 H-1B visas this year. “To build a championship team, you recruit the best players wherever they are,” Musk posted on X (formerly Twitter).

Revenue Generation from H-1B Visas

Each year, the US Citizenship and Immigration Services (USCIS) processes hundreds of thousands of H-1B applications, collecting considerable revenue through mandatory fees:

Base Application Fee: $460 per petition.

1. Fraud Prevention and Detection Fee: $500, applicable for initial filings and transfers.
2. American Competitiveness and Workforce Improvement Act (ACWIA) Fee: $750 for small businesses and $1,500 for larger companies.
3. Premium Processing Fee (Optional): $2,500 for expedited application handling.
4. In fiscal year 2022, USCIS received over 480,000 applications, with 85,000 visas issued under the cap. The program generates hundreds of millions annually. According to a 2023 report by the American Immigration Council, filing fees alone contribute over $500 million annually, funding workforce training and anti-fraud efforts.

Earnings of H-1B Workers

H-1B workers are predominantly employed in high-paying industries such as technology, engineering, and healthcare. Employers are required to pay wages that match the prevailing rates for the job and location.

For instance, Amazon’s average salary for H-1B software developers in 2022 was $126,000. Salaries vary by region, with workers in Silicon Valley earning an average of $140,000 annually, while those in smaller cities earn closer to $100,000.

Other sectors, including healthcare and academia, also employ H-1B professionals, with median salaries often exceeding $80,000 annually. These workers fill critical gaps in the US workforce, especially in STEM fields, where the annual shortfall exceeds 1.2 million professionals.

Tax Contributions from H-1B Workers

Although temporary residents, H-1B visa holders pay the same taxes as US citizens, provided they meet the substantial presence test. This includes federal, state, and local taxes, as well as Social Security and Medicare contributions.

Income Taxes: A worker earning $100,000 annually pays around $18,000 in federal taxes and $5,000–$7,000 in state and local taxes, depending on their location.

Social Security and Medicare: H-1B workers contribute 6.2% of their salary to Social Security and 1.45% to Medicare, with employers matching these contributions. For a $120,000 salary, combined contributions total $18,360 annually.

Despite paying into these systems, many H-1B workers do not fully benefit from Social Security due to their temporary status. According to a 2022 report by the Cato Institute, H-1B workers contribute over $5 billion annually in taxes, supporting essential services like education, infrastructure, and public safety.

Economic Impact Beyond Taxes

H-1B workers drive economic activity through their spending habits, investments, and entrepreneurial endeavors.

1. Consumer Spending: High salaries allow H-1B workers to spend heavily on housing, healthcare, and leisure. In Silicon Valley, for example, many pay over $30,000 annually in rent.
2. Investments: These professionals contribute to retirement plans, insurance, and mutual funds, bolstering the financial sector. Their remittances also promote global economic connectivity.
3. Innovation and Job Creation: Over half of US tech unicorns were founded by immigrants, many of whom began on H-1B visas. For every H-1B job created, an estimated 2–3 additional jobs emerge in related industries.
4. H-1B visa holders also enhance domestic workforce skills through mentorship and knowledge transfer, boosting overall productivity. A Brookings Institution study in 2021 found that a 1% increase in H-1B workers corresponds to a 0.5% rise in US GDP.
5. H-1B visa holders are vital contributors to the US economy, not only through taxes but also by driving consumer spending, fostering innovation, and filling critical workforce gaps. Their contributions underscore the program’s significance as a catalyst for economic growth and competitiveness.