Future Business Leaders of America (FBLA) Entrepreneurship Practice Test

Which one of the following taxes is paid by business employers?

1. Payroll Taxes

2. Corporate Income Taxes

3. Unemployment Taxes

4. Sales Taxes

The correct answer is: Unemployment Taxes

The correct answer is unemployment taxes, which refers to the taxes that employers are required to pay to fund unemployment insurance programs. These taxes are typically assessed on the wages that employers pay their employees, and they are essential for providing financial support to workers who lose their jobs through no fault of their own. Unemployment taxes differ from payroll taxes, which encompass social security and Medicare taxes that are withheld from employees' wages. While businesses do contribute to payroll taxes, unemployment taxes are specifically designated for unemployment benefits, making them a distinct obligation of business employers. Corporate income taxes, on the other hand, are taxes that a business pays on its profit, which is a liability that varies with the company's earnings rather than a direct obligation tied to employment. Sales taxes are typically collected directly from consumers at the point of sale and are not an obligation that employers are required to pay directly; instead, they act as intermediaries responsible for collecting and remitting these taxes to the government. Therefore, unemployment taxes uniquely represent the financial responsibility that employers have in supporting employees during periods of unemployment.