Unemployment Taxes are those paid by employers into a federal or state fund to pay benefits to employees who are terminated. The unemployment tax rate is based on the type of employer and the turnover in that industry. In the fast food industry, for example, turnover is very high, so unemployment taxes for fast food businesses will be high. Businesses with low turnover pay lower unemployment taxes.
Unemployment taxes are paid to the federal government, but some states also have unemployment tax funds into which companies in that state must pay. Check with your state employment agency for more information.
