Ability to Pay Explained: How an Employer Proves It Can Pay the Proffered Wage on Form I-140

The Short Version

Any employment-based immigrant petition that requires a job offer must show that the sponsoring employer had the ability to pay the proffered wage from the moment the priority date was established, and continued to have it until the employee becomes a lawful permanent resident. This requirement is about the company, not the employee. No matter how strong the beneficiary’s credentials are, a weak financial record can produce an RFE, a NOID, or a denial.

USCIS looks at this in two layers. First, whether the required evidence is complete — annual reports, federal tax returns, or audited financial statements, one of the three, for every year from the priority date forward. Second, what those documents show: wages actually paid, net income, and net current assets. Meeting any one of the three generally suffices; if none does, a totality-of-the-circumstances analysis remains available.

The Governing Regulation

Every rule in this area traces back to a single federal regulation, 8 CFR 204.5(g)(2). The text is short, and every clause matters:

• Who it applies to: any employment-based immigrant petition that requires an offer of employment.
• The time span: from the date the priority date is established, continuing until the beneficiary obtains lawful permanent residence.
• Acceptable evidence: annual reports, federal tax returns, or audited financial statements.
• Large-employer exception: where the employer has 100 or more workers, the director “may” accept a statement from a financial officer.
• Additional evidence: profit and loss statements, bank account records, or personnel records, submitted by the petitioner or requested by USCIS.

The reasoning behind the rule comes from Matter of Great Wall, 16 I&N Dec. 142 (Acting Reg. Comm. 1977): the employer must be offering a realistic job offer, and whether the company can actually pay the wage is one of the essential elements in evaluating that. The current USCIS Policy Manual cites this decision in its opening paragraph.

Which Categories Require It — and Which Do Not

The test is simple: does the category require an offer of employment? USCIS Policy Manual, Volume 6, Part E, Chapter 4 gives the full list:

The Window: Start, End, and One Important Exception

Start: the priority date

Under 8 CFR 204.5(d), there are two scenarios. Where a labor certification is involved, the priority date is the date the labor certification application was accepted for processing by the Department of Labor. Where no labor certification is required (EB-1B, EB-1C), it is the date the complete, signed petition — with all initial evidence and the correct fee — was properly filed with USCIS.

End: when the beneficiary becomes a permanent resident

Approval of the I-140 does not end the obligation. The regulation says continuing until the beneficiary obtains lawful permanent residence — meaning approval of the I-485 or admission on an immigrant visa. USCIS can reexamine ability to pay in post-adjudication proceedings.

Exception: porting under AC21 while the I-140 is pending

Where the I-485 has been pending 180 days or more and the beneficiary ports to a new job in the same or a similar occupational classification under AC21 while the I-140 remains pending, USCIS considers only the facts existing at the time of filing. In effect, the window compresses to priority date through the I-140 filing date, and later years drop out of the analysis.

Required Initial Evidence: One of Three Types, Every Year

The one-of-three refers to document types, not to years. The Policy Manual requires one of the following for each available year from the priority date forward.

1. Annual reports: for public companies, either the SEC Form 10-K or the annual report to shareholders qualifies. Annual reports of private companies are also acceptable, but are most persuasive when they contain audited financial data.
2. Federal tax returns: the most common choice. Returns should be complete, including all required schedules. Where the evidence falls short, or where the employer amended its returns mid-adjudication, USCIS may request IRS-issued certified copies or transcripts.
3. Audited financial statements: examined under an acceptable standard by an accountant authorized to perform the audit — for example, a CPA applying GAAP — and accompanied by an auditor’s report.

One line deserves emphasis: filing these documents does not by itself establish ability to pay. USCIS analyzes the financial information inside them to determine whether it is persuasive.

The 100-Employee Shortcut, and Six Times It Fails

An employer with 100 or more workers may submit a financial officer statement in place of annual reports, tax returns, or audited financial statements. Financial officer is not limited to the CFO — any employee authorized to manage and oversee the organization’s financial actions, or a delegate within the financial hierarchy, may qualify. Common titles include CFO, principal financial officer, vice president of finance, chief accounting officer, treasurer, comptroller, and financial director. Detailed letters that explain the basis of the conclusion in terms of the company’s finances are the most probative.

Bear in mind this is discretionary, not a right — the regulation says may accept. USCIS lists situations where the statement alone may not suffice:

1. the employer has filed petitions for multiple beneficiaries, such that its ability to pay all salary obligations is in question;
2. evidence in the record suggests the employer may have fewer than 100 employees;
3. the document is a copy of a letter dated several years before filing and previously submitted with other petitions;
4. the letter is inconsistent with other evidence or publicly available information — for example, large losses or bankruptcy proceedings;
5. in a successor-in-interest case, the only evidence is a letter from a financial officer of the predecessor company;
6. the statement does not indicate that the signatory is a financial officer of the petitioner.

Path One: Wages Actually Paid to the Beneficiary

Where the employer establishes by documentary evidence that it paid the beneficiary a salary equal to or greater than the proffered wage for each year from the priority date, that evidence may establish ability to pay. This is the most useful path for smaller companies — book profit may look thin, but payroll records are hard evidence.

USCIS accepts the following to establish wages paid:

• IRS Form W-2 (Wage and Tax Statement);
• IRS Form 1099-MISC (Miscellaneous Income);
• State wage and withholding reports that list the individual employee.

Two traps. First, payments that do not compensate through wages do not count — health insurance premiums and housing allowances (unless stated on the labor certification and advertised) are excluded. Second, where actual pay falls short, the gap does not have to be made up in full: the employer only needs to show net income or net current assets covering the difference.

Path Two: Net Income and Net Current Assets

Net income

Revenues less all expenses over a period of time — also called net profit or ordinary income depending on corporate structure. Where it equals or exceeds the proffered wage (or the gap between the proffered wage and wages actually paid), ability to pay is generally established. Its position on the return shifts as the IRS revises the forms, so identify the line by its label rather than its number: look for Ordinary business income (loss) or Taxable income. For tax year 2025:

Net current assets

Current assets minus current liabilities, usually taken from Schedule L of the return. Current assets are items with a life of one year or less in most cases — cash, marketable securities, inventory, prepaid expenses. Current liabilities are obligations payable within one year in most cases — accounts payable, short-term notes payable, accrued expenses. Where the figure equals or exceeds the proffered wage (or the gap), ability to pay is generally established.

USCIS does not look at total assets, because total assets must be balanced against liabilities and may include items that cannot easily be converted to cash to pay a wage.

The Two Figures Cannot Be Added, and Depreciation Is Not Added Back

These are the two places where a well-meaning financial adviser can weaken a petition by putting the wrong argument in writing.

1. Net income plus net current assets is not a valid total: net income covers a period of time, net current assets is a snapshot at a moment in time. USCIS states that the two metrics cannot be combined.
2. Depreciation is not added back to net income: in River Street Donuts, LLC v. Napolitano, 558 F.3d 111 (1st Cir. 2009), the First Circuit held that USCIS did not abuse its discretion by excluding the employer’s depreciation deductions from net income when finding it unable to pay.

Prorating the Wage in the Priority Date Year

Where the priority date falls mid-year, the employer may request that the proffered wage be prorated for the applicable portion of that year — an often-overlooked pressure valve. Two rules come with it:

• Net income must be prorated too: USCIS will not apply twelve months of net income to a period shorter than twelve months. Monthly income statements covering the relevant period are the usual evidence.
• Net current assets are not prorated: as a balance-sheet snapshot, the year-end figure for the priority date year is used as is.

Path Three: Totality of the Circumstances

Failing all three figures does not necessarily end the case. This fallback comes from Matter of Sonegawa, 12 I&N Dec. 612 (Reg. Comm. 1967): a Pasadena custom dress and boutique shop showed net profit of only $280 in 1966 against a $6,240 annual wage, but the year included a relocation with five months of double rent and interrupted business, while the shop’s reputation, press coverage, clientele and following-year results made its revenue expectations reasonable. The petition was approved.

Factors USCIS may weigh in the totality analysis include:

• the employer’s gross sales and gross revenues;
• total wages paid to current employees during the most recent fiscal years;
• media accounts about the business;
• the number of years the employer has been in business;
• the historical growth of the business;
• recent changes that disrupted or interrupted the business, such as reorganization, merger, or bankruptcy;
• the employer’s number of employees;
• uncharacteristic expenditures or losses from which the employer has since recovered, such as fire or flood damage;
• the employer’s overall reputation within its industry.

The Policy Manual singles out two favorable situations: the beneficiary is replacing a former employee or an outsourced service, and an officer of the petitioning employer is willing and able to forego compensation specifically to cover the wage. Companies operating at a loss because of research and development should fully explain the sources of funding and the expected profit potential.

Multiple Beneficiaries: Where Growing Companies Get Caught

Where the same employer has filed I-140 petitions for several employees, USCIS examines whether it can pay the combined proffered wages, year by year from the priority date of the petition under review. Sponsoring three employees at $100,000 each means covering $300,000; if two of them are already being paid in full, the remaining obligation is the third person’s $100,000.

There are four situations in which another beneficiary’s wage drops out of the total:

1. years after that beneficiary obtained lawful permanent residence;
2. where the employer withdrew the petition filed on that beneficiary’s behalf;
3. where that petition was denied or revoked without a pending appeal or motion;
4. years before that beneficiary’s priority date.

When responding to a multiple-beneficiary inquiry, submit a schedule: receipt numbers for all relevant I-140s, each beneficiary’s name, each proffered wage and priority date, the current status of each petition and the date of any status change, and year-by-year evidence of wages paid to each (W-2s, Forms 1099-MISC, state wage reports, or payroll records).

Entity Type Changes the Math

One principle governs: USCIS counts only the financial resources of parties with an explicit legal obligation to pay the wage.

Using Bank Statements and Lines of Credit Effectively

Bank statements

We keep half a million in the account — how is that not enough to cover a $100,000 salary? is the standard founder’s objection. Bank statements are usable, but they are additional evidence, not required initial evidence, and USCIS has two reservations: a statement shows the balance on a given date without identifying funds already obligated elsewhere, and those same funds have likely already been counted in taxable income or net current assets on the return — counting them again is double counting.

To make them work, the employer should submit all monthly statements since the priority date and establish both that the amounts have not already been considered elsewhere and that they reflect sufficient cash under the totality of the circumstances. Natural-person employers are the exception — in sole proprietorship and general partner cases, where personal assets are already in scope, bank statements carry meaningfully more weight.

Lines of credit

Documentation of access to credit can establish a baseline of creditworthiness and may be weighed under the totality of the circumstances. One hard rule applies: an undrawn line cannot be treated as cash and is not added to net income or net current assets — the same logic as a credit card limit. Amounts actually drawn appear on the balance sheet and are fully considered in the net current assets calculation. An employer relying on a line of credit should submit evidence of the amount available, such as monthly statements, and show that the credit augments rather than weakens its overall financial position.

Three Practical Routes for Startups and Loss-Making Companies

1. Raise actual pay first and use the wages-paid path: before filing PERM and the I-140, bring the employee’s actual salary to at least the proffered wage. Note the benchmark is the proffered wage, not the prevailing wage — the proffered wage is frequently higher, and paying only the prevailing wage leaves a gap. Once the W-2 clears, net income and net current assets need only cover the difference (none, if there is none) — but the annual report, tax return, or audited financial statements must still be filed for every year.
2. Obtain audited financial statements: where R&D deductions and depreciation push the tax return into a loss while the underlying asset position is healthy, audited statements present the real picture more completely. Confirm they are audited, not compiled or reviewed.
3. Build the totality argument proactively: add financing agreements and proof of funds received, long-term commercial contracts, revenue growth, headcount trends and industry coverage — and fully explain the sources of funding and the expected profit potential, which is precisely what the Policy Manual asks of R&D-stage companies.

Misconceptions at a Glance

Frequently Asked Questions

Our company is new and still operating at a loss. Can we still sponsor a green card?

It is possible, but the evidence has to be stronger. The most effective approach is to raise the employee’s actual salary to at least the proffered wage and rely on the wages-paid path, while also submitting audited financial statements and fully explaining the sources of funding and expected profit potential. USCIS expressly recognizes that a company may operate at a loss to improve its long-term position, using multi-year research and development costs as its own example.

We hold $500,000 in the bank. Why are bank statements alone not enough?

Because bank statements are additional evidence rather than the initial evidence the regulation requires. A statement shows the balance on a given date without indicating whether those funds are already obligated, and the same money has usually been counted already in taxable income or net current assets on the tax return, so counting it again is double counting. To use statements, submit all monthly statements since the priority date and establish that the amounts have not been considered elsewhere.

The employee’s W-2 already exceeds the PERM wage. Do we still file tax returns?

Yes. The USCIS Policy Manual states that even where the employer establishes it paid the beneficiary at or above the proffered wage, the petition must still contain an annual report, federal tax return, or audited financial statements for each year from the priority date; employers with 100 or more workers may substitute a financial officer statement. Clearing the wage removes the numerical comparison, not the required documents.

We are sponsoring several employees at once. Do the petitions undermine each other?

They can. USCIS requires the employer to show it can pay the combined proffered wages of pending and approved beneficiaries, calculated year by year. Four situations remove a beneficiary from the total: years after that person obtained permanent residence, withdrawal of that petition, denial or revocation without a pending appeal or motion, and years before that person’s priority date. In addition, if the beneficiary under review has been paid in full and the required evidence is complete, the officer need not reach the aggregate analysis.

I ported under AC21 while the I-140 was pending. Is the original employer still reviewed?

Yes, but over a shorter window. Where a beneficiary ports to a new employer under AC21 while the I-140 is pending, USCIS considers only the facts existing at the time of filing — that is, ability to pay from the priority date through the I-140 filing date. Later years are not examined.

The owner is personally wealthy. Can we use his savings to show the company can pay?

If the employer is a corporation or a single-member LLC, no. USCIS generally does not consider the resources of persons or entities with no legal obligation to pay the wage, which includes shareholders, officers and parent companies. Those funds usually need to be contributed into the company through a lawful route to count. Where the employer is a sole proprietorship or a general partnership, the opposite is true: the owner’s personal income and liquid assets are already within scope.

Sources: 8 CFR 204.5(d) and 204.5(g)(2); USCIS Policy Manual, Volume 6, Part E, Chapter 4 (current as of August 12, 2026); Matter of Great Wall, 16 I&N Dec. 142 and Matter of Sonegawa, 12 I&N Dec. 612, as published by the Department of Justice, Executive Office for Immigration Review; and IRS Forms 1120, 1120-S and 1065 for tax year 2025. Tax return line numbers change from year to year — identify the line by its label on the applicable year’s form. Always confirm against the most recent official releases. This article is general information only and does not constitute legal advice, nor does it create an attorney-client relationship. GOH1B is an independent Chinese-language immigration information platform and does not provide legal services; legal services referenced here are provided by Luo & Associates Law Group, P.C.