EIN number: How Much Does It Cost? Why It’s Worth It?

If you’re starting a business, thinking about hiring, or just trying to keep your tax life under control, you’re going to need an EIN number. It doesn’t sound exciting—but it matters.

Think of it like a Social Security number… for your business. It’s how the IRS tracks you. It’s how banks size you up. And it’s the number that quietly sits behind things like payroll, loans, and licenses.

Not glamorous. But absolutely essential.

What exactly is an EIN number?

An EIN number (short for Employer Identification Number) is a nine-digit number assigned to your business by the IRS. It shows the government—and other institutions—that your business exists and plays by the rules.

You’ll need it for:

• Hiring employees
• Filing business taxes
• Opening a business bank account
• Applying for licenses or permits

Even if you’re solo or running a part-time side hustle, having one gives you structure—and options.

How does an EIN number work?

Your EIN is like your business’s fingerprint. When you open accounts, pay staff, or file returns, this is the number you use.

Banks want it before opening a business account. The IRS uses it to track taxes. State agencies need it for licenses and payroll. Vendors may ask for it too.

If your business does anything official, your EIN is part of the paperwork.

Why you might need one

Why? Because it lets you keep your personal info (like your Social Security number) off business forms. That alone is a win. There are a few cases where the IRS requires it if you:

• Hire people
• Business is a partnership, corporation, or multi-member LLC
• Need to file employment, excise, or certain federal taxes
• Have a Keogh retirement plan
• Withhold taxes for non-U.S. residents

But even if you’re not legally required to have one? It’s still worth getting.

Who can apply for an EIN number?

Pretty much anyone with a business. Just make sure the person applying has official authority—usually the founder or someone listed in legal documents:

• Freelancers and solo founders
• LLCs and corporations
• Nonprofits and side hustles
• International companies doing business in the U.S.

How much does it cost?

Zero. It’s completely free through the IRS. If you see a website trying to charge you to “get your EIN fast,” walk away. That’s a scam. The IRS doesn’t charge for this.

When is an EIN number 100% required?

If any of that applies to you, don’t wait. Just get it done early. There’s no wiggle room in these cases—you need an EIN if:

• You have employees
• You operate as a corporation or partnership
• You file excise taxes or have certain retirement plans
• You’re managing taxes for non-resident workers

How to apply for an EIN number?

Pro tip: The online method is fastest and works for most U.S.-based businesses. It’s actually pretty easy:

1. Online: Go to the IRS site. Fill out the form. Get your number immediately.
2. Fax or mail: Use Form SS-4. Slower, but works if you can’t apply online.
3. Phone: Only for international applicants, but available if needed.

Why the EIN number matters daily

And it keeps your personal identity protected, which makes tax time (and every bank form ever) way easier. This one little ID number helps you:

• Pay employees through payroll software
• Open business bank and credit accounts
• Apply for business licenses
• Get loans or financing
• Build trust with partners and clients. 

Also, other ways an EIN makes life smoother:

• Builds credibility: Vendors and banks take you more seriously.
• Keeps taxes separate: Clean lines between business and personal income.
• Protects you: No more putting your SSN on every form.
• Speeds up paperwork: From loan apps to legal docs, you’ll need it often.

Can you have more than one?

Only if you have more than one legal entity—like multiple LLCs or corporations. One EIN per business.

If you get multiple for the same company? That’s a fast track to tax headaches. Stick to one.

What happens if the EIN is lost or misplaced?

They’ll help you recover it. Just don’t guess—it needs to be exact. You’ve got options:

• Check your original IRS confirmation letter (Form CP 575)
• Look on tax returns or payroll paperwork
• Call the IRS Business line: 800-829-4933

Canceling or reusing your EIN number

An EIN is forever. Once it’s tied to your business, it’s yours—even if you shut down.

If you want to officially close up shop, send the IRS a letter with your EIN and a short note saying the business is done. They’ll mark it inactive, but they won’t reassign it to anyone else.

Common mistakes to avoid

It’s all fixable—but easier to get right the first time. Here’s where people trip up:

• Typing the wrong EIN on tax forms
• Forgetting to tell the IRS when the business changes
• Mixing up business name and EIN in filings
• Assuming you don’t need one (when you actually do)

What role does HR play in keeping EINs on track?

Small detail. Big responsibility. If you have an HR team—even if you are the HR team—someone needs to:

• Make sure employee forms list the correct EIN
• Handle payroll and benefit deductions cleanly
• Track EIN-related filings and reports
• Know how to handle changes or terminations

Your EIN won’t win you customers or land your next deal. But it will quietly make your life easier every time you file, apply, hire, or grow.

It’s free. It’s easy to get. And it keeps your business running smoothly behind the scenes. So if you haven’t already applied, do it now. You’ll be glad you did.