| Federal Unemployment - FUTA The federal unemployment tax (FUTA) is part of the federal that pays unemployment compensation to employees who have lost their jobs. This tax is not paid by the employee as they will not see this deduction on their paycheck. The employer is required to pay this tax to fund a portion of the unemployment compensation that is collected by an employee discharged from its company, whether it is through a layoff, firing, or discharge for any other reason. |