How to Get an EIN and Register as an Employer

Before you run payroll for your first employee, you need the right tax registrations in place. That starts with getting an EIN from the IRS and setting up the employer accounts your state requires.

What Is an EIN?

An Employer Identification Number (EIN) is a nine-digit federal tax ID assigned by the IRS to identify your business. Think of it like a Social Security number for your business: it is the number the IRS uses when you file payroll and business tax forms.

Most employers need an EIN before they can:

• Withhold and deposit payroll taxes.

• File federal payroll forms like Form 941.

• Open a business bank account, in many cases. 

How to Get an EIN Free

The good news is that getting your EIN is one of the simplest steps in setting up payroll.

You apply directly through the IRS website, and there is no fee to apply. In many cases, qualified applicants receive their EIN immediately after completing the online form.

Here is what the process usually looks like:

1. Go to the official IRS EIN online application page.

2. Answer a few questions about your business structure, address, and ownership.

3. Submit the application.

4. Save your EIN confirmation notice for your records. 

Apply here: 

• Apply for an Employer Identification Number (EIN) Online

Quick facts

• Free — there is no cost to apply.

• Online — done directly through the IRS website.

• Fast — many applicants receive their EIN instantly.

Do You Need an EIN to Run Payroll?

If you are hiring employees and handling payroll tax withholding, you generally need an EIN. The IRS uses your EIN to identify your business for tax reporting and deposits.

You should also keep your EIN confirmation in a safe place. You will need it for payroll software, bank accounts, and state tax registrations.

Common EIN Mistakes

Paying a third-party site to “help” you get an EIN

You do not need to pay anyone to apply for your EIN. The IRS application is free, and you can complete it yourself directly through IRS.gov.

Assuming you can skip the EIN because you are small

If you hire employees and withhold payroll taxes, the IRS generally requires an EIN for reporting and depositing those taxes.

Not saving the EIN confirmation

Keep the EIN assignment PDF and your business name and address records in a secure but easy-to-find place.

Federal Payroll Registration

Once you have your EIN, you can begin setting up the federal payroll responsibilities required to pay employees and report employment taxes. These are not one-time tasks — they repeat every pay period and every filing quarter.

This usually includes:

• Withholding federal income taxes from each employee’s paycheck.

• Withholding the employee share of Social Security and Medicare taxes.

• Paying the employer share of Social Security and Medicare taxes.

• Depositing these taxes on the IRS schedule that applies to your business.

• Filing federal payroll tax forms such as Form 941 each quarter.

You can review the IRS guidance here:

Depositing and Reporting Employment Taxes

State Registration

Federal registration is only one piece of the puzzle. In most states, you must register separately before you can legally withhold and remit taxes for employees who work there.

Typical state-level registrations include:

• State income tax withholding — required in most states to withhold state taxes from employee paychecks.

• Unemployment insurance account setup — required in every state so eligible workers can receive unemployment benefits.

A crucial rule for remote and multi-location teams: register in the state where the employee physically works, not just where your business is headquartered.

Local Registration

In some locations, federal and state registration are not enough. Certain cities and counties also require employers to register locally or withhold local income taxes from wages.

This is most common in certain locations, including:

• Some states with local payroll tax requirements, such as Pennsylvania, Ohio, and Maryland.

• Major cities like New York City, Philadelphia, and Denver.

If your employees work in any of these areas, check local requirements before running your first payroll.

Common Registration Mistakes

Forgetting remote-worker states

If your employee lives and works in a different state than your business address, that state may require you to register and withhold there.

Mixing up federal, state, and local requirements

• Federal = EIN and IRS payroll forms.

• State = unemployment and state income tax.

• Local = city or county payroll or wage taxes, if applicable.

Waiting until payday to start registration

Some states and agencies can take days or weeks to approve registrations or issue tax IDs. Start this process before your first employee’s first day.

Key Takeaway

Before you run payroll, your business must be registered at the federal level with an EIN and payroll tax setup and, in most cases, at the state level for withholding and unemployment. Your EIN is the foundation — everything else, including payroll tax deposits, tax filings, and compliance, builds on top of it.

Already set up? Make sure you are also classifying your workers correctly before your first payroll run:
W-2 vs. 1099: How to Classify Workers the Right Way

Frequently Asked Questions

Can I run payroll without an EIN?

If you are hiring employees and handling payroll tax withholding, you generally need an EIN.

How long does it take to get an EIN?

In many cases, the IRS issues an EIN immediately after the online application is completed.

Is it free to apply for an EIN?

Yes. The IRS does not charge a fee to apply for an EIN.

Do I need a new EIN if I already have one from a previous business?

Sometimes. It depends on whether your business structure has changed, such as moving from a sole proprietorship to an LLC or corporation.

What if I have employees in multiple states?

You will likely need to register in each state where employees work.

Continue learning:

After setting up your employer registrations, the next step is making sure your workers are classified correctly before your first payroll run. 

➡️ Up Next: W-2 vs. 1099: How to Classify Workers the Right Way