EIN for Small Businesses: How to Get One & When You Need It

Key takeaways

• An EIN is your federal tax ID used for taxes, banking, and hiring.

• You can apply online with the IRS at no cost — the process takes about 15 minutes.

• You can find your EIN on IRS notices, previous tax returns, or bank records.

What is an EIN?

An employer identification number (EIN) is a nine-digit tax ID the IRS gives your business. It’s how the IRS identifies your business for federal taxes. Think of it like a Social Security number- but for your business instead of you personally.

The IRS uses your EIN to track your business’s tax filings, payments, and reporting obligations. Banks, vendors, and government agencies use it too. Your EIN appears on all official tax documents, business bank account applications, payroll filings, and vendor forms. Whether you’re a sole proprietor, partnership, LLC, or corporation, this number matters. The IRS uses it to track your business income and employment taxes.

Your EIN follows this format: XX-XXXXXXX. Once assigned, it’s yours permanently – even if you change your business name or location. Most small businesses apply for an EIN early in the setup process. Many do this before opening a business bank account or filing a first tax return.

You may also hear an EIN called a:

• Federal tax ID number: The most common alternative name

• Federal employer identification number (FEIN): Used interchangeably with EIN

• Tax ID number: A broader term that includes both EINs and Social Security numbers

An EIN separates your business and personal finances, keeping your Social Security number off invoices, vendor agreements, and banking documents—which reduces your identity theft risk. If you hire employees, you’ll need one to file payroll taxes and issue W-2 forms. It also lets you build business credit in your company’s name rather than relying on your personal credit history.

The IRS provides clear guidance on when and how to obtain one, and the application process is completely free.

Types of businesses that need an EIN

The IRS requires an EIN for most business structures – but not all. Whether you need one depends on how your business is set up and what it does.

You’re required to get an EIN if you:

• have employees and pay wages

• operate as a corporation or partnership

• file employment or excise tax returns

• withhold taxes on income paid to a non-U.S. resident

• have certain special retirement plans for yourself

Even if it’s not required, getting an EIN is highly recommended for most small businesses. Sole proprietors and single-member LLCs without employees often apply anyway because it:

• makes it easier to open a business bank account – most banks require an EIN to separate business and personal finances

• lets you build business credit separate from your personal credit history

• reduces your risk of identity theft by keeping your Social Security number off business documents

• signals credibility to vendors and clients who ask for an EIN before working with you, and keeps your personal details private

What an EIN is used for

Your EIN is the primary identifier your business uses across tax, banking, and legal processes. Once you have one, you’ll use it more often than you might expect.

Here’s where your EIN comes into play in your daily business operations:

• Filing federal taxes: Your EIN appears on every business tax return you file with the IRS.

• Opening a business bank account: Banks require an EIN to verify your business is a separate legal entity, and that account helps you keep company money separate from your personal funds.

• Hiring employees: You need an EIN to process payroll, withhold taxes, and issue W-2s.

• Paying contractors: When you pay a contractor $600 or more in a year, you’ll need your EIN to file a 1099 form.

• Applying for business licenses: Many state and local agencies require your EIN during the licensing process.

• Applying for business credit: Lenders use your EIN to pull your business credit profile when you apply for loans or lines of credit.

• Setting up vendor accounts: Suppliers often request your EIN before extending payment terms or net terms.

• Filling out W-9 forms: Clients and vendors may request your EIN on a W-9. Using it instead of your Social Security number helps protect your personal information.

How to get an EIN for your small business

Applying for an EIN is free and takes as little as 15 minutes online. The IRS offers four ways to apply, but the online option is by far the fastest.

Apply online (fastest)

The IRS online EIN application is available Monday–Friday, 7 a.m.–10 p.m. ET. For most small business owners, this is the easiest method. You get your number right away and don’t need to wait for mail. The system walks you through each step and checks your details as you go. This helps you avoid mistakes that could slow down your application.

Here’s how the online process works:

1. Go to the IRS EIN Assistant at IRS.gov and confirm you’re eligible. Your main place of business must be in the U.S. or a U.S. territory.

2. Select your business structure by choosing from sole proprietor, LLC, corporation, partnership, or other entity types. The system will ask specific questions based on your selection.

3. Answer the application questions where you’ll provide basic information about your business and the reason you’re applying.

4. Submit your application, and your EIN is issued immediately upon completion.

5. Once you finish, save or print your EIN confirmation letter. The IRS won’t mail it to you automatically. Saving or printing this letter is your proof that you have an EIN. Keep this letter in a safe place with other important business documents—you’ll need it for banking, vendor setup, and tax filings.

Other ways to apply

If you can’t apply online, the IRS offers three alternatives with longer processing times:

• You can apply by fax by completing Form SS-4 and faxing it to the IRS, and you’ll receive your EIN within about four business days.

• If you prefer mail, send a completed Form SS-4 to the IRS and allow four to five weeks for processing.

• If your business is not based in the U.S. or its territories, you can apply by phone by calling the IRS at 267-941-1099 (not toll-free), Monday–Friday, 6 a.m.–11 p.m. ET.

What you’ll need to apply

Before you start, gather the details you’ll need to avoid delays or having to start over:

• legal business name and physical address — a P.O. box won’t work for the principal address, so make sure you have a physical location

• your Social Security number or ITIN, which is required for the responsible party

• your business structure, for example an LLC, sole proprietorship, or corporation

• your reason for applying, such as starting a new business, hiring employees, or opening a bank account

• your business start date or acquisition date, as the IRS will ask for this during the application

• the EIN of any parent entity, if the business is owned by another entity

Never pay for an EIN application. The IRS does not charge any fees, but some third-party websites charge $50 to $300 to submit your application on your behalf. This is completely unnecessary — always apply directly through the official IRS website to avoid scams and unnecessary costs.

Once you have your EIN, you’re ready to move forward with opening bank accounts, setting up payroll, and paying vendors. For a comprehensive overview of small business tax terms and requirements, check out the ultimate small business owner’s dictionary.

EIN cost and timeline

Getting an EIN is completely free. The IRS doesn’t charge any fees to apply, regardless of which method you use.

Be cautious of third-party websites that charge a fee to apply on your behalf. These services aren’t affiliated with the IRS, and you can always apply directly at no cost. Some of these sites charge $50–$300 to apply for you. The process is the same as doing it yourself on the official IRS website, so you don’t gain anything by paying them.

Here’s what to expect depending on how you apply:

• Online: EIN issued immediately upon completion

• By fax: EIN received within four business days

• By mail: EIN received within four to five weeks

For most small business owners, the online application is the clear choice. It’s fast, free, and you get your number the same day. The time it takes to get your EIN depends on how you apply, with the fastest method being online, which provides your EIN immediately upon completing the application. If you apply by fax, you can expect to receive your number in about four business days, while applying by mail is the slowest option, with processing times of about four to five weeks.

When you need a new EIN

Your EIN is permanent – but certain business changes require you to apply for a new one. The IRS ties your EIN to your business structure, so if that structure changes significantly, your existing EIN may no longer apply.

You must get a new EIN if:

• you change from a sole proprietorship to a partnership or corporation

• you form an LLC that the IRS treats as a corporation

• you change from a partnership to a corporation

• a corporation dissolves and begins operating as a partnership or sole proprietorship

• you take over or purchase an existing business as a sole proprietor under a different structure or name

• you file for bankruptcy and the business is reorganized

You can keep your existing EIN if:

• you change your business name, location, or trade name

• ownership changes but the business structure stays the same

• you’re a sole proprietor who forms a single-member LLC

• your LLC elects to be taxed as an S corp

If you’re not sure whether your situation requires a new EIN, the IRS provides a short questionnaire to help you decide. When in doubt, consult a tax professional.

If your business is going through significant changes and you’re managing complex tax obligations, it might be time to hire an accountant to help you navigate the transition smoothly.

Simplify your business financial management

Once you have your EIN, the next step is putting it to work. You’ll use it to open a business bank account, pay contractors, file taxes, and manage vendor relationships. Having your EIN makes these money tasks more organized and consistent.

That’s where Melio comes in. Melio helps small businesses manage bill payments and invoicing in one place, so you can pay vendors, contractors, and suppliers on time—without the manual work. You can schedule payments in advance, sync everything with QuickBooks or Xero, and track every transaction in one place. No more chasing down paper checks or manually entering payment details.

Whether you’re paying 1099 contractors or managing recurring vendor bills, Melio helps you keep payments and your accounting software in line with each other. With Melio, you’ll spend less time on accounts payable and more time growing your business.

Sign up for Melio to make paying and getting paid for your business simpler.

EINs for small businesses FAQs

Find answers to the most frequently asked questions about EINs for small businesses below.

Do I need an EIN for a small business?

Not always – but most small businesses benefit from having one. You’re required to get an EIN if you have employees. You also need one if you run a corporation or partnership, or if you file certain federal tax returns. Even if you’re a sole proprietor without employees, it still helps to get an EIN. It makes it easier to open a business bank account. It also protects your personal information and helps you build business credit.

Do I need an LLC or EIN first?

Form your LLC with your state first, then apply for an EIN through the IRS. You’ll need your LLC to be officially registered before the IRS can assign an EIN to it. The EIN application is free. Once your LLC is set up with your state, you can get your number in minutes on the IRS website.

How much does it cost to get an EIN?

Applying for an EIN is completely free through the IRS. Avoid third-party websites that charge a fee—they’re not affiliated with the IRS and the service is unnecessary. The IRS doesn’t charge any service fees for the online, fax, or mail application, so you can apply directly with the IRS at no cost.

Do freelancers and independent contractors need an EIN?

Freelancers and independent contractors aren’t required to have an EIN, but many choose to get one. It protects your Social Security number when you fill out W‑9 forms for clients. It can also make it easier to open a business bank account and present yourself as a business, not just as an individual. It can also help you build business credit that’s separate from your personal credit.

Can I change my EIN information after I get it?

Yes. If your business name or address changes, you can notify the IRS without getting a new EIN by filing Form 8822-B with the IRS or reporting changes on your next tax return. However, you cannot cancel or change your actual EIN number—it stays with your business permanently. If you need a new EIN due to significant business structure changes, you must apply for a completely new number.