FUTA

FUTA, or the Federal Unemployment Tax Act, is a U.S. law that mandates employers to pay a federal tax to fund unemployment benefits for workers who lose their jobs. This tax is primarily based on employee wages and is paid by employers, not employees. The funds collected help support state unemployment insurance programs, which provide financial assistance to unemployed individuals. While employers pay FUTA, it helps ensure that there are resources available for workers during periods of unemployment, contributing to economic stability.