Employers are required to collect valid taxpayer identification information during the hiring and onboarding process. The two most common identifiers used for payroll in the U.S. are Social Security Numbers (SSNs) and Individual Taxpayer Identification Numbers (ITINs). Understanding the difference helps ensure accurate reporting and compliance with federal requirements.

Table of Contents

• What Is a Social Security Number (SSN)?
• What Is an Individual Taxpayer Identification Number (ITIN)?
• Key Differences Between SSNs and ITINs
• SSN Validation & Onboard Status

What Is a Social Security Number (SSN)?

• An SSN is a 9-digit number issued by the Social Security Administration (SSA).
• SSNs are used to track an individual’s lifetime earnings, determine eligibility for Social Security benefits, and report wages for tax purposes.
• Most employees working in the U.S. are required to have an SSN.

Payroll Impact

• Employers must report wages and taxes under the employee’s SSN.
• SSNs are required for filing Forms W-2 and W-3 with the IRS and SSA.

What Is an Individual Taxpayer Identification Number (ITIN)?

• An ITIN is a 9-digit number issued by the Internal Revenue Service (IRS).
• ITINs are designed for individuals who are not eligible for an SSN but still need a taxpayer identification number.
• Examples include nonresident aliens, dependents, or spouses of U.S. citizens/residents who cannot obtain an SSN.

Important Limitations

• ITINs are used only for federal tax filing.
• An ITIN does not authorize employment in the U.S. and cannot replace an SSN on payroll records.
• Employers cannot use an ITIN in place of an SSN when submitting W-2s.

Key Differences Between SSNs and ITINs

Why This Matters for Payroll

• Employers must collect valid SSNs for all employees.
• An ITIN should never be used in place of an SSN on payroll records.
• If an employee provides an ITIN instead of an SSN, employers should request clarification — the individual may not be authorized to work in the U.S.
• Incorrect use of ITINs in payroll reporting can result in IRS penalties and compliance issues.

Key Takeaways

• SSNs are required for payroll and tax reporting for employees.
• ITINs are for tax purposes only and do not establish work eligibility.
• Employers should verify that every employee provides a valid SSN before processing payroll.
• Using an ITIN in payroll systems may trigger errors, delays, or penalties.

SSN Validation & Onboard Status

Employee and contractor onboard status considers the SSN validation status. If an employee or individual contractor has a null or invalid SSN (as indicated by the SSN validation status), their onboard status will be in NEEDS ATTENTION. 

Business contractors' onboard status does not consider SSN validation status. However, business contractors' onboard status will be BLOCKED if the contractor does not have a valid EIN.

SSN Validation Status

• An employee's SSN validation status must satisfy the SSN criteria.
• A contractor's SSN validation status can meet either the SSN or ITIN criteria.

SSN validation status is calculated asynchronously when the SSN value is updated.

Helpful Resources

We also have additional SSN-related resources that may help:

• FAQ: Invalid SSNs, 900-Series Numbers, and Payroll Compliance

You can also refer to either of the following official government resources:

• SSA: Learn About Social Security Numbers
• IRS: Individual Taxpayer Identification Number (ITIN)
• USCIS: Employment Eligibility Verification (Form I-9)