What Is a NAICS Code? NAICS Structure, Hierarchy & How to Read NAICS Codes
Governed reference
NAICS is the official 6-digit industry classification system used across the United States, Canada, and Mexico to classify establishments (individual business locations) by their primary economic activity. NAICS groups establishments by similar production processes—not by brand labels or product names.
Defensible workflow: Use the directory/lookup to find candidates, open the code detail page to verify the official definition and included/excluded boundaries, then document the proxy used (commonly revenue/value of shipments) to support audit-ready classification.
- What NAICS is (and what it’s not)
- NAICS structure: 2-digit to 6-digit
- Why digit 6 matters (National Industry level)
- Process-based vs product-based (baker vs retailer example)
- How to read a NAICS code (worked example)
- Primary NAICS code and establishment rule
- “Dominant activity” (the 51% rule and real-world splits)
- Search vs. classify (defensible workflow)
- Risk control: boundaries and “look-alike” industries
- NAICS tools and reference guidance
- 8-digit “extended” NAICS codes (marketing use)
- NAICS history, governance, and updates
- GEO: using NAICS for geographic market strategy
- How NAICS is used in business and government
- Register your NAICS code on SICCODE.com
- FAQ
What NAICS Is (And What It’s Not)
The North American Industry Classification System (NAICS) is a standardized framework used by federal statistical agencies to classify economic activity in a consistent way across North America. It is used for statistics, reporting, and many workflows where industry definition and scope matter.
NAICS is…
- A standardized, hierarchical coding system for industry classification
- Assigned at the establishment level (a specific business location)
- Process-based: it groups establishments by how goods/services are produced
NAICS is not…
- A marketing slogan or brand category
- A “covers-everything” description of all business lines
- A company-wide tag that must apply to every location
If you need the legacy system, see What Is a SIC Code?. For direct comparison, see SIC Codes vs NAICS Codes.
NAICS Structure: 2-Digit to 6-Digit
NAICS is hierarchical. Each additional digit narrows the definition, moving from broad sectors to a specific national industry.
In most government programs, procurement, banking, and underwriting workflows, the operational standard is the 6-digit NAICS code.
Example drill-down (real code path)
Sector (2)
11 Agriculture, Forestry, Fishing & Hunting
Subsector (3)
111 Crop Production
Industry Group (4)
1113 Fruit & Tree Nut Farming
NAICS Industry (5)
11133 Noncitrus Fruit & Tree Nut Farming
National Industry (6)
111331 Apple Orchards
This is the same “general → specific” logic you use when drilling down from any sector (including Manufacturing).
Official NAICS background and definitions are published by the U.S. Census Bureau: U.S. Census NAICS page.
Why Digit 6 Matters (The “National Industry” Level)
National refinements: Digits 1–5 are generally harmonized across the United States, Canada, and Mexico. The 6th digit is reserved for national industry refinements—meaning a 5-digit category may be shared across countries, while the 6-digit detail can vary to reflect each country’s economic structure.
This is one reason “close” codes can look similar at 4–5 digits but become meaningfully different at the 6-digit level. When you need precision, verify the 6-digit definition on the code detail page.
Process-Based vs Product-Based (Baker vs Retailer)
NAICS can classify two establishments that “sell the same product” into different industries because their production process differs.
Makes bread (production) and sells it
Because the dominant activity is making the product
Buys bread and sells it (no production)
Because the dominant activity is resale
Same product, different process: “Bread” can appear in both establishments—but the NAICS code depends on whether the establishment primarily produces (manufacturing) or resells (retail).
This “process over product” rule is a common reason users misclassify look-alike industries. Always confirm the official definition and boundaries on the code detail page.
How to Read a NAICS Code (Worked Example)
NAICS codes read left-to-right from general to specific. Use this pattern to interpret what each digit level contributes.
Sector (2)
11 Agriculture, Forestry, Fishing & Hunting
Subsector (3)
111 Crop Production
Industry Group (4)
1113 Fruit & Tree Nut Farming
Industry (5)
11133 Noncitrus Fruit & Tree Nut Farming
National Industry (6)
111331 Apple Orchards
Extended (8)
111331-02 Marketing-level refinement (example)
The “extended” example is not an official government NAICS level; it is a commercial segmentation layer used in some datasets.
Primary NAICS Code and the Establishment Rule
Each establishment is assigned one primary NAICS code representing the location’s dominant economic activity. Dominance is commonly determined using measurable proxies such as revenue or value of shipments, with other proxies used as tie-breakers when needed.
Critical rule: NAICS is assigned by establishment (business location), not by enterprise-wide brand. That means a company can have multiple primary NAICS codes across different locations if the dominant activities differ.
See: How Many NAICS Codes Can a Company Have? • What Is an Establishment in NAICS? • What Is an Enterprise in NAICS?
“Dominant Activity” (The 51% Rule and Real-World Splits)
“Primary” does not mean an establishment only does one thing. It means one activity is the largest share of the establishment’s measurable output. In some cases, the primary activity may be a majority (often described as a “51% rule”), but real establishments can be split across multiple lines where no single activity exceeds 50%.
Search vs. Classify (The Defensible Workflow)
Keyword search helps you find candidate codes. Classification is the verification step that makes the selection defensible for SBA, banking, underwriting, procurement, and audits.
Describe what the establishment does (process), not a brand label
Use lookup results to identify likely matches
Confirm the official definition + scope notes
Check included vs excluded activities
Record the proxy used (revenue, employment, etc.)
In high-stakes workflows, step 3–4 is what separates a “guess” from a defensible classification decision.
Step-by-step guide: How Do I Find My NAICS Code?
Risk Control: Boundaries and “Look-Alike” Industries
Why boundary checks matter
Many classification errors happen because users choose a code that sounds right but fails the included/excluded scope test. This can create downstream issues in procurement classification, underwriting risk grouping, eligibility checks, and analytics.
- Use included vs excluded logic to separate similar activities and avoid “near-match” misclassification.
- Use establishment-level logic so multi-location companies don’t force one code onto all sites.
- Use process-based reasoning when industries share products but differ by production process.
Use these references when verifying scope: NAICS Included vs Excluded Activities • NAICS Classification Methodology
Helpful NAICS Tools and Reference Guidance
Find codes (lookup & directory)
Use the directory to browse the hierarchy or search by activity keywords.
Need the “how-to” workflow? How Do I Find My NAICS Code?
Governance and accuracy (audit-ready)
Use governance and methodology references when you need consistency and defensibility across teams and time.
NAICS Classification & Reference Center
NAICS Data Governance & Versioning
NAICS Codes for Government Programs & Compliance
Code conversion tools (cross-reference)
- NAICS-to-SIC Cross Reference – Convert NAICS codes to SIC
- SIC-to-NAICS Cross Reference – Convert SIC codes to NAICS
Manufacturing hierarchies (Sector 31–33)
If you are classifying a manufacturing establishment, start with the manufacturing hierarchy and drill down to the most specific process-based category.
- NAICS 31 – Food, Beverage, Apparel, Textiles
- NAICS 32 – Chemicals, Plastics, Paper, Petroleum
- NAICS 33 – Machinery, Electronics, Transportation
8-Digit “Extended” NAICS Codes (Marketing Use)
The official NAICS structure ends at 6 digits. However, some commercial datasets use an additional “extended” layer (often described as 8-digit or “marketing-level”) to support finer segmentation for list building, niche targeting, and analytics.
Important: Extended codes are not a government NAICS standard. They are a commercial/marketing segmentation layer used to refine targeting beyond official 6-digit categories.
Explore extended segmentation: Extended NAICS Code Lookup Directory.
NAICS History, Governance, and Updates
NAICS replaced the legacy SIC system to modernize industry classification and align industry groupings across North America. It is updated periodically to reflect the evolving economy.
| Year | Milestone | Data governance meaning |
|---|---|---|
| 1997 | NAICS formally adopted | Replaced SIC with process-based North American alignment |
| 2002 | NAICS revision | Updated categories to reflect structural economic shifts |
| 2007 | NAICS revision | Refined definitions and boundaries to reduce ambiguity |
| 2012 | NAICS revision | Added/updated categories for new and evolving industries |
| 2017 | NAICS revision | Continued modernization; many legacy systems still reference these codes |
| 2022 | NAICS revision (current published revision) | Recency check: verify that a 2017-based code has not been consolidated, renamed, or re-scoped |
| 2027 | Next scheduled revision cycle | Planned update cycle to keep definitions aligned with economic evolution |
Official reference: U.S. Census NAICS page. Governance context: NAICS Data Governance & Versioning.
GEO: Using NAICS for Geographic Market Strategy
This page is primarily a classification and governance reference, but NAICS is also a powerful GEO segmentation key: it lets you quantify and target industries by geography (state, metro, county, ZIP, or custom territories) using a consistent industry definition.
Territory planning
Build or refine territories by combining geography with a 6-digit industry definition.
Market sizing
Estimate how many establishments exist in an industry within a region before launching outreach.
Competitive density
Compare industry concentration across regions using the same classification baseline.
GEO accuracy depends on classification accuracy: If your NAICS code is wrong, every geographic slice (state, metro, county) is distorted. Always verify the code definition and boundaries before using NAICS in location-based analytics or targeting.
If you need industry + geography targeting, start with verified lists: USA Business Lists.
How NAICS Is Used in Business and Government
Market identification
Group customers and prospects by industry to support segmentation and outreach planning.
Start with lookup: NAICS Code Lookup Directory.
Programs & compliance
NAICS is used in workflows where eligibility or reporting depends on a definable industry scope.
NAICS Codes for Government Programs & Compliance
SBA size standard hook: In many SBA programs, the NAICS code you use determines the size standard applied to decide whether you qualify as a small business for that program. That makes accurate classification financially important—not just “administrative.”
Analytics & benchmarking
Use consistent industry groupings to compare peers and measure trends across datasets.
Government use cases (high level)
- Data collection and analysis: consistent collection, presentation, and analysis of economic data.
- Program administration: aligns requirements and thresholds to definable industry scope (often at 6 digits).
- Auditing and compliance workflows: uses definitions and boundaries to group comparable establishments.
Register Your NAICS Code on SICCODE.com
Once you identify and verify your NAICS code, you can associate it with a business profile on SICCODE.com. This creates a structured reference point that improves clarity for partners, vendors, and data users.
Why registration helps: Industry codes are used as declared attributes in many workflows. Publishing your verified code in a classification-first context reduces ambiguity, supports data integrity, and improves audit readiness.
FAQ
Does NAICS end at 6 digits?
Yes. The official government NAICS structure ends at 6 digits. Some commercial datasets use an additional “extended” layer for marketing segmentation, but it is not an official NAICS standard.
If you’re seeing 8-digit “marketing-level” codes in lists or platforms, explore how extended segmentation works here: Extended NAICS Code Lookup Directory.
Why is digit 6 called “National Industry”?
Digits 1–5 are generally harmonized across the United States, Canada, and Mexico. The 6th digit provides country-level “national industry” refinement, so the 6-digit detail can vary by country even when the 5-digit category is shared.
Can a company have more than one NAICS code?
Yes. NAICS is assigned at the establishment level, so different locations of the same company can have different primary NAICS codes if the dominant activities differ.
How do I pick the correct NAICS code?
Use the lookup to find candidates, then confirm the official definition and included/excluded boundaries on the code detail page. Use a measurable proxy (commonly revenue/value of shipments) to identify the dominant activity.
Start here: NAICS Code Lookup Directory
Need help with NAICS classification? Contact Us.