When you're paid in cash for a job, your income may not be reported to the government which may complicate the calculation of your federal unemployment tax rate. The federal unemployment tax is a part of the Federal Unemployment Tax Act (FUTA). This collected tax is used to fund unemployment benefits for people who have lost their jobs. But if you're working a cash job and your income is not officially reported, this could affect your eligibility for unemployment benefits should you lose your job. It's important to understand the intricacies of the unemployment tax system and its accompanying regulations.