Shallow foundations have been situated on unsaturated soils, ignoring the existence of matric suction that is closely related to the shear strength of the soil (Rojas et al. 2007; Vanapalli and Mohamed 2007; Jeong et al. 2008; Kim et al. 2016; Wu and Selvadurai 2016). Settlement is important in foundation engineering and might be affected by matric suction in accordance with the principles of unsaturated soil mechanics. However, the design of shallow foundations is conducted in accordance with the principles of saturated soil mechanics. A considerable number of researchers have studied the effects of matric suction on the strength of unsaturated soil. Rahardjo et al. (2011) proposed an empirical equation to estimate the modulus of elasticity with the incorporation of matric suction. They concluded that the soil stiffness appears to increase with increasing matric suction. Oh et al. (2009) also developed a theoretical equation for the modulus of elasticity with respect to matric suction that incorporated the soil–water characteristic curve (SWCC). Nevertheless, past research has neglected the effect of matric suction, which leads to an overestimation of the settlement of shallow foundations. Very few studies have attempted to examine the transient behavior of unsaturated soil in inducing additional settlement of shallow foundations through laboratory or model tests. The main influencing factors on the fundamental mechanism of the settlement behavior of shallow foundations were investigated (Briaud and Gibbens 1999; Oh and Vanapalli 2011; Mohamed 2014). Numerical studies were also carried out to estimate the settlement of shallow foundations under steady-state and transient conditions (Abed and Vermeer 2009; Park 2017). However, while these previous studies were focused on the effect of matric suction, few studies have examined the effect of rainfall infiltration on shallow foundation stability because of the difficulties associated with the determination of the input parameters in constitutive equations and the uncertainties associated with the flux boundary conditions. Unsaturated soils below shallow foundations usually experience wetting–drying cycles due to climate conditions. The wetting–drying cycles have a significant impact on SWCCs (Fredlund and Rahardjo 1993). Hysteresis may affect the mechanical behavior and transient process in unsaturated soils (Nuth and Laloui 2008; Rahardjo et al. 2013; Kim et al. 2016). However, the effect of hysteresis has also been ignored in assessing the settlement of shallow foundations. In particular, no study has been carried out on the investigation of hysteresis for simulations of a shallow foundation under rainfall. In this study, the effects of rainfall infiltration and hysteresis on the settlement of shallow foundations in unsaturated soil were numerically investigated. Numerical solutions were compared with experimental data for verification. Rainfall intensities and groundwater table positions that contribute to the additional settlement of shallow foundations were investigated through a series of parametric studies. The effect of hysteresis on the settlement behavior of shallow foundations was considered by incorporating hysteretic SWCCs obtained from the laboratory. Index properties and hysteretic SWCCs of the Dogye weathered granite soil were used for numerical analyses.