What is the purpose of an Employer Identification Number?
An employer identification number (EIN) is used by the federal government to identify each employer for a variety of federal reporting requirements. In the context of payroll, it is used to report employment taxes and is included in the tax statements given to employees.
An EIN is a unique nine digit number arranged as follows: 00-0000000. It is used to identify the tax accounts of employers and is used on all items sent to the IRS, Social Security Administration, and certain other federal agencies.