How is an EIN tax ID number different from a Social Security tax ID?

Both Social Security numbers and EINs are identification numbers to allow the IRS to enforce tax laws and rules, but a Social Security number is for an individual taxpayer, while an EIN number is for business taxpayers. Business owners usually need an EIN as well as a Social Security number.

A sole proprietor who is self-employed and has no employees can use his Social Security number as his business tax identification number. A business that has employees must use its EIN to file payroll and other business taxes. The business uses its employer identification number when filing for payroll tax deductions.