Your L-1 visa can get denied because of payroll mistakes.Tax issues you never considered. Payroll structures that seem fine but violate immigration rules. These problems derail petitions constantly.USCIS scrutinizes how companies pay L-1 employees. Wrong setup? Denial. Missing documentation? Request for Evidence. Improper tax treatment? Petition rejected.We compared five immigration consultation firms that understand L-1 payroll requirements and prevent tax-related denials.
Beyond Border catches L-1 payroll problems before they destroy your case.Their team reviews your complete compensation structure during initial consultations. Who pays your salary? Which country's payroll? What tax jurisdiction?Beyond Border identifies red flags immediately. Foreign payroll only? Problem. No US tax withholding? Bigger problem. Consulting fees instead of W-2 wages? Petition killer.
They coordinate with tax advisors to structure compensation properly. Some situations require dual payroll arrangements. Others need careful documentation of foreign payment justifications.For L-1A tax compliance, Beyond Border ensures executive compensation gets reported correctly. High salaries raise questions if not properly documented and taxed.Their L-1B payroll setup guidance prevents specialized knowledge cases from failing due to payment irregularities.
Initial consultation costs $200. L-1 petitions with payroll review run $3,500 to $6,500 including coordination with tax professionals. Beyond Border doesn't file until payroll structures comply with both immigration and tax requirements. Their prevention approach saves clients from expensive denials.
Worried about payroll compliance for your L-1? Book a consultation with Beyond Border to review your compensation structure.
Fragomen works with corporate payroll departments regularly. They understand multinational compensation structures.They identify L-1 payroll gotchas through standardized checklists. Is the employee on the US payroll? Are taxes withheld properly? Does compensation match the petition?
Fragomen coordinates with corporate tax teams to ensure compliance. They flag situations where foreign payroll continues during US assignments without proper documentation.Their experience with global mobility programs helps. Many multinational companies use split payroll or tax equalization arrangements. Fragomen documents these properly.
The Downside
Focus on large corporate clients means less guidance for smaller companies setting up first L-1 transfers. Standard processes don't address startup payroll challenges well.L-1 petitions cost $4,500 to $7,000 without separate tax advisory services.
BAL integrates payroll compliance checks into their L-1 process.Their platform prompts payroll questions early. Who employs the L-1 worker? Which entity pays salary? How are taxes handled?
BAL identifies common mistakes. Contractors paid through invoices instead of payroll. Foreign subsidiaries paying US-based L-1 workers without proper documentation. Inconsistent salary information between petition and payroll records.They explain the right-to-control test. The US petitioning company must control the employee's work even if compensation comes from abroad initially.
The Downside
Technology flags issues but doesn't always provide solutions. Complex international payroll situations need deeper analysis than automated systems that offer L-1 petitions cost $3,800 to $5,500.
Klasko handles sophisticated L-1 compensation structures expertly.Their attorneys understand tax treaty implications. How taxation affects immigration status. When foreign payroll is acceptable and when it creates problems.
Klasko excels at explaining employer-employee relationships in complex payment scenarios. If a foreign parent pays your salary but you work for the US subsidiary, they document this relationship properly.They coordinate with international tax advisors. Some cases need careful structuring to satisfy both IRS requirements and USCIS expectations.
The Downside
Premium pricing and longer timelines reflect their thorough approach.L-1 petitions with compensation analysis cost $6,000 to $9,500.
Murthy has seen every L-1 payroll mistake imaginable over three decades.They warn clients about common errors. Delaying US payroll setup until after visa approval. Maintaining only foreign compensation without documentation. Mismatching salary information between petition and actual payments.
Murthy's checklists help companies establish compliant payroll before filing. They explain that USCIS expects US companies petitioning for L-1 workers to eventually pay those workers through US payroll.Their guidance on tax withholding requirements prevents problems. Social Security, Medicare, federal and state taxes must be handled properly.
The Downside
Less integration with tax advisory services. Clients often need separate tax counsel.L-1 petitions cost $3,500 to $5,200.
Foreign payroll only creates major problems. If the US company petitions for you but doesn't pay you, USCIS questions the employment relationship.Some companies keep L-1 employees on foreign payroll initially to avoid US tax complications. This needs extensive documentation explaining the business justification and showing the US entity controls the work.Independent contractor payments kill L-1 cases. Receiving 1099 forms instead of W-2s proves you're not an employee. No employment means no L-1 visa.Mismatched salary information triggers denials. The petition states $120,000 salary but actual payroll shows $80,000? USCIS assumes you lied.No tax withholding suggests improper employment status. US employees must have federal and state taxes withheld. Missing withholding indicates contractor relationships or illegal payment structures.
Some countries have tax treaties affecting where income gets taxed. These treaties don't eliminate US payroll requirements for L-1 workers.You might avoid double taxation through foreign tax credits. But you still need proper US payroll setup if working in America.Beyond Border coordinates with international tax advisors when treaty issues arise. Immigration law and tax law must align.
1.Can L-1 employees be paid by the foreign company?
L-1 employees can initially be paid by the foreign company if properly documented, but the US petitioning entity must control the employment relationship and eventually establish US payroll to satisfy USCIS requirements and IRS tax obligations.
2.What payroll setup does USCIS require for L-1 visas?
USCIS expects the US petitioning company to establish proper payroll with tax withholding including federal, state, Social Security, and Medicare taxes, issuing W-2 forms rather than 1099s to prove genuine employment relationships.
3.Do L-1 visa holders pay US taxes?
Yes, L-1 visa holders working in the United States must pay US federal and state income taxes, Social Security, and Medicare taxes on US-sourced income regardless of which entity pays their salary or their tax residency status.
4.Can independent contractor payments qualify for L-1?
No, independent contractor payments disqualify L-1 applicants because the visa requires genuine employer-employee relationships with W-2 wages and tax withholding, while 1099 contractor payments prove no employment relationship exists for immigration purposes.
5.What happens if L-1 salary doesn't match the petition?
If actual L-1 salary doesn't match the petition amount, USCIS may deny extensions or renewals for material misrepresentation, require amended petitions explaining changes, or question the employment relationship's legitimacy affecting future immigration benefits.
