What does EIN stand for?

The term EIN stands for Employer Identification Number. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity for tax purposes. It is often used by employers when filing federal tax returns, making payroll tax deposits, and reporting income to the IRS. The EIN is critical for businesses as it serves a similar purpose as a Social Security number does for individuals, allowing for proper identification and tracking of tax obligations.

Understanding EIN is particularly important for payroll processing, as it helps ensure accurate reporting of employee wages and tax liabilities. Employers need this number to comply with a variety of federal regulations, including tax withholding for employees, social security contributions, and other employment tax matters.