Source: https://rivet.global/blog/us-remittance-transfer-tax
Published: 2026-08-24 · Updated: 2026-08-24 · By William Sunjo M.

# The 1% US remittance transfer tax: does it apply to business payments?

A 1% US excise tax on some remittance transfers started on 1 January 2026. What it covers, the cash test, and why account-funded business payments are exempt.

## Key takeaways

- The One Big Beautiful Bill Act added a 1% excise tax on certain remittance transfers from the US, starting with transfers after 31 December 2025.
- The tax applies when the sender pays the provider with cash, a money order, a cashier's check or a similar physical instrument.
- Transfers funded from an account at a financial institution, or with a US-issued debit or credit card, are exempt.
- The remittance provider collects the tax from the sender and pays it to the Treasury.
- A business paying suppliers or contractors abroad from its business account is generally outside the tax.

The One Big Beautiful Bill Act, signed in July 2025, added a 1% federal excise tax on some remittance transfers out of the US. It applies to transfers made from 1 January 2026. Headlines about a "remittance tax" made many businesses that pay people abroad wonder whether every international payment now costs an extra 1%. For most of them, it does not.

## What the tax covers

The tax applies to a remittance transfer when the sender gives the provider:

- cash,
- a money order,
- a cashier's check,
- or a similar physical instrument.

The provider collects 1% of the amount from the sender and pays it to the Treasury.

## What is exempt

The law exempts transfers that are:

- funded from an account the sender holds at a financial institution, or
- funded with a debit or credit card issued in the United States.

In practice this means walk-in cash remittances are taxed, and transfers sent from a bank or similar account are not.

## What this means for businesses

| Payment | Taxed? |
|---|---|
| Company pays a supplier abroad by wire from its business account | Generally no |
| Company pays contractors abroad in a batch from its account balance | Generally no |
| Company pays an overseas bill with its US business card | Generally no |
| Someone hands cash to a money transfer agent to send abroad | Yes, 1% |

The rules use a consumer-protection definition of remittance transfer in parts, and detailed IRS guidance governs how providers apply it. If your company sends money in an unusual way, for example by buying money orders, ask your provider how it treats those transfers.

## What to check

1. Fund international payments from your business account, not with cash or money orders.
2. Read the fee breakdown on your provider's confirmation. A 1% tax line should not appear on account-funded transfers.
3. Keep payment records showing the source account. That is your evidence the exemption applies.

Our guide to [the true cost of international payments](/blog/true-cost-of-international-payments) covers the fees that do apply to most transfers: the transfer fee, the FX markup and intermediary bank charges.

This article explains the rules in general terms. It is not tax advice.

## On Rivet

Payouts on Rivet are funded from your company's account balance, with the full cost shown before you approve. See [Payouts](/payouts).

## Questions

### What is the US remittance transfer tax?

A 1% federal excise tax on remittance transfers where the sender gives the provider cash, a money order, a cashier's check or a similar physical instrument. It applies to transfers made after 31 December 2025.

### Does the remittance tax apply to wire transfers from a bank account?

Transfers funded from an account held at a financial institution are exempt under the law. A wire or international transfer paid from your business bank account is generally not taxed.

### Who pays the remittance tax?

The sender, through the provider. The remittance transfer provider collects the 1% when the transfer is made and remits it to the Treasury on a quarterly basis.

### Does the remittance tax apply to card-funded transfers?

Transfers funded with a debit or credit card issued in the US are exempt under the law.