If you’ve hired a virtual assistant from the Philippines, a designer in Eastern Europe, or a support team overseas, you might want to perk up. There’s a new bill on the table—the 2025 Hire Act—and it could change the game for small business hiring.
No, this isn’t just for the Amazons and Metas of the world. If passed, this bill could impact your business too. The good news? It’s not law yet. The better news? You still have time to plan.
What Is the 2025 Hire Act?
The 2025 Hire Act is a proposed bill introduced in Congress that aims to reduce offshoring by adding a big ol’ financial disincentive. It suggests a 25% excise tax on the compensation paid to certain foreign workers and would also eliminate the deduction for those expenses on your business tax return.
Translation: hiring overseas might get significantly more expensive.
The bill hasn’t passed yet, but the buzz is real. And if it does pass, implementation could begin as soon as January 2026. That gives you about 12 months to get your house in order.
Who Does This Apply To?
The proposed bill covers:
- U.S.-based companies hiring non-U.S. workers
- Workers providing services remotely (not necessarily relocating)
- Contractors as well as employees
So yes, your overseas VA or designer might fall under this.
It doesn’t matter if they’re technically an independent contractor or paid via PayPal. If they’re working for your U.S. business and they live and work abroad, they could count.
What This Means for Your Budget
Let’s say you pay your overseas contractor $40,000 a year. Under this proposed act:
- You’d owe an additional $10,000 in excise tax (25%)
- You would lose the ability to deduct that $40,000 as a business expense
That could increase your real cost significantly—not to mention mess with your margin, cashflow, and year-end tax liability.
This Isn’t About Politics. It’s About Planning.
We’re not here to debate policy. We’re here to help you not get blindsided. Whether you’re currently hiring overseas or were planning to, this bill could impact your costs and your strategy moving forward.
Now is the time to:
- Model out the worst-case scenario
- Compare the cost of domestic vs. foreign contractors under these rules
- Build flexibility into your 2025 and 2026 hiring plans
- Understand how your payroll and contractor mix could change
Domestic Hiring Isn’t Your Only Option—But It Might Be the Safer One
This bill doesn’t mean you have to hire domestically. But it might make that the more cost-effective path. Especially if you’re in that growth stage where margins matter and every dollar counts.
The key is to know your numbers. And to make decisions proactively—not reactively.
Let’s Future-Proof Your Hiring Plan
No one knows if this bill will pass. But even if it doesn’t, the conversation is gaining traction. And the businesses that stay ahead of it will be the ones who don’t find themselves scrambling in Q1 2026.
Want help modeling out your hiring costs and building a smart, flexible plan? Book a call today and let’s make sure your next hire doesn’t come with surprise taxes.
