Introduction
For any employer, understanding the FEIN number—also known as an Employer Identification Number (EIN)—is fundamental to hiring staff, filing taxes, and running payroll. This guide presents a straightforward overview of what a FEIN is, why employers need one, and how to obtain it efficiently.
What Is a FEIN?
A FEIN is a unique nine-digit identifier assigned by the IRS to businesses for tax and payroll purposes—think of it as your business’s Social Security number. You use it when reporting employment taxes, opening bank accounts, registering for licenses, or fulfilling any official business-related tasks.
Who Needs a FEIN?
If your business fits any of the following criteria, you'll need a FEIN:
- Employs one or more workers
- Is structured as a corporation, partnership, or multi-member LLC
- Files employment or excise tax returns
- Withholds taxes on non-wage payments to non-resident aliens
- Operates as a nonprofit, estate, or trust requiring tax filing
Even if it's not required, having a FEIN is often advantageous—for building business credit, protecting your personal SSN, or setting up banking.
How to Apply for a FEIN
Obtaining a FEIN is free and easy. Employers can apply via either:
- IRS Online Portal: Available for businesses with a U.S. address and a responsible party with a valid U.S. taxpayer ID. Once submitted, your FEIN is issued immediately.
- Mail or Fax: Complete IRS Form SS-4 and submit it to receive your FEIN—typically within days or weeks, depending on delivery method.
- Phone (International Applicants): Available if your business is based outside the U.S.; you can receive your FEIN over the phone.
Use Cases: Why FEIN Matters
Here’s where your FEIN comes into play:
- Opening business bank accounts and credit lines
- Applying for business licenses or permits
- Filing employment tax returns or common payroll documents
- Maintaining separation between personal and business finances
When to Get a New FEIN
You generally need a new FEIN under conditions like:
- Changing your business structure (e.g., from sole proprietorship to corporation)
- Incorporating or otherwise formally restructuring the business
- Being involved with multiple entities, such as trusts or estates
Conclusion
A FEIN is essential for employers handling payroll, taxes, and formal financial operations. Whether required or optional, it's a key tool that distinguishes your business and safeguards your personal information. Obtaining one early streamlines your operations, protects your identity, and positions your business for growth.
Need streamlined documentation tools to go along with your FEIN setup? Generate accurate pay stubs instantly or explore examples in our Regular Pay Stub guide.
