Glossary

Employer Identification Number

By Fredrik Filipsson, cofounder of Business Bank Index
Reviewed by Morten Andersen
Definition

An Employer Identification Number, or EIN, is a unique nine digit number issued by the United States Internal Revenue Service to identify a business or other entity for federal tax purposes.

Information as of 24 October 2025Last reviewed 24 October 2025

General information, not financial, legal, or tax advice. Verify current terms and eligibility with the provider before applying.

An Employer Identification Number is a nine digit federal tax ID that the United States Internal Revenue Service issues to a business. It identifies the business for tax purposes and is often needed to hire employees, open a business bank account, and apply for licenses.

How an EIN works

An EIN functions for a business much like a Social Security number does for an individual, giving the entity a unique federal identifier for tax matters. The Internal Revenue Service issues the number, and a business uses it to file federal tax returns, report and pay employment taxes, and identify itself to banks and other institutions. Many business bank accounts in the United States require an EIN to open, as do various licenses and permits, current as of 24 October 2025.

Who needs an EIN and how to get one

Most businesses need an EIN, including corporations, partnerships, multi member limited liability companies, and any business with employees. Some sole proprietors without employees may instead use their own Social Security number, though they can still choose to obtain an EIN. The Internal Revenue Service issues EINs free of charge. Applications can be made online, by fax, or by mail using Form SS-4, and the responsible party in control of the business must provide their own taxpayer identification details. If forming a legal entity, the entity is generally registered with the state first.

Why it matters to a business

For business banking, the EIN is often the key identifier a bank uses to open and run a business account, separating business finances from personal ones. It also supports tax compliance and payroll. Because requirements depend on the entity type and on whether the business has employees, and because procedures can change, confirm current rules with the Internal Revenue Service or a qualified adviser before relying on them.

Frequently asked questions

What is an Employer Identification Number?
An Employer Identification Number, or EIN, is a unique nine digit number issued by the United States Internal Revenue Service to identify a business or other entity for federal tax purposes. It works for a business much like a Social Security number does for an individual.
Who needs an EIN?
Most businesses need an EIN, including corporations, partnerships, multi member limited liability companies, and any business with employees. Some sole proprietors without employees may use their own Social Security number instead, although they can still choose to get an EIN.
How do you get an EIN?
The Internal Revenue Service issues EINs free of charge. You can apply online, by fax, or by mail using Form SS-4. The responsible party in control of the business must provide their own taxpayer identification details when applying.
Do you need an EIN to open a business bank account?
Many business bank accounts in the United States require an EIN to open, although requirements depend on the entity type. Confirm what identification is needed with the specific bank before applying.

Definitions, fees, features, and eligibility change and vary by region. This page was last reviewed on 24 October 2025. Confirm current terms with the provider before applying.

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