Difference between Employer and Employee

In entrepreneurship and commerce, the terms employer and employee are used quite often. Both the terms involve ‘services’ and ‘payment,’ which are very important to the business.

Understanding Employers

Employers like an organization or company that offer service and product to an employee or any person that hire service from an employer, and for which an employee needs to pay. There’re many kinds of employers like individual, small and large business, professional service agency, government entity, non-profit organization and retailer or wholesaler. Both an employer and an employee should agree to exchange their service or product, as per the organization policy. This includes more legally outlines, wages, salary, and other important rules.

Understanding Employee

Employee, on the other hand, is a person that works part-time or full-time as per the requirements and gets compensation for their services. Any employee who is hired for the specific service and in return the employer needs to pay certain profit to an employee, but in freelancing, an employee pays for a specific service that he has worked. This can be in weeks to months.

Looking at the Common Features

Mutual Dependence

An employer and an employee depend on one another to attain a set target and thus mutually get something from one another.

It is one important factor that enables sustainability. The employers are dependent on an employee for performing certain specific tasks and help them to achieve the business goals and make sure their business or organization runs smoothly.

An employee depends on an employer to pay them the agreed wages or salary and thus make them to support themselves & possibly their families financially. If any one of them feels that they aren’t getting much on their end, this relationship will likely get terminated if the negotiations fail. An employer may choose to fire an employee if they’re dissatisfied or the employee will just quit or resign their position.


There is a relationship between an employer and an employee that should be developed with time. The development needs an input of both the parties. An employer will play their part to establish & develop the strong relationship with the employees just by showing their interest away from work, and asking employees about their personal life and learning more about what their interests.

Employees will contribute by staying a bit more open to the employers and discussing about their lives besides work comfortably. Both the relationships are very important for the success of a business as the strong relationship makes their workers satisfied and improves productivity.


For the sustainable relationship, there has to be well established lines that must not at all be crossed and beyond this a relationship stops getting beneficial to the business anymore, at times even toxic. The limits and restrictions exist in each company setup though the kind of relationship that is considered healthy might vary from one company to another.

Generally, any romantic relationships between an employer and an employee are not very healthy in most of the companies. An employee must be careful in not developing any relationship with their employer that is closer than relationship between an employer and other employees as it might raise favoritism concerns & other unfairness troubles in a workplace. An employer and employee have to share this responsibility of ensuring that the relationship doesn’t cross any restrictions of professionalism & company standards.

Difference between Employer and Employee


The employer and employee have got different goals for an existence of the relationship. An employer has to improve their business productivity and earning by hiring the employee and assign them a project to reach the specific target.

Alternatively, an employee wants the job for which he’s provided with the proper services needed by the organization for a fixed salary.

Cash Flow

It is a known fact that an income of one individual expense for another” and it is called the cash flow system. And in business field, one-sided salary and expenses deducted from an employer income makes for an employee income.

Roles & Responsibilities

Role of an employer is to offer complete protection to a working employee as well as help in all way possible. In which an employer will fulfill their purpose. An employer gives lots of facilities to an employee like health care, salary, safety and wages.

Alternatively, responsibility of an employee will be that he’s obliged to complete their work assigned by an employer. Employee has to serve an employer with complete loyalty and dedication during the time.


An employee has little authority according to an employer. The employer will control their employee activity that an employee does, and allocate rules by an employer. Based on these policies, the employers will report on employees.

But, the employee doesn’t have more authority. And they will be able to control only the low-level employee, which will be terminated if any employee breaks the rules or business policy.

Point of Difference



Goal Maximize the efficiency and productivity. To financially support their families.
Cash flow Gives out cash (or salary) as the deduction and gets proceeds from business. Gets the salary as addition and, contributes to producing more income for an employer.
Roles & responsibilities Ensure employees health, safety, and welfare are rightly taken care and offer conducive working atmosphere. Serve your employer faithfully, follow rules, honor your contract of employment & uphold diligence and loyalty in your service.
Level of authority Has got authority over the employees. Has got authority just over employees at lower levels.

It is now simple to tell besides these two often used terms after checking out some differences and goals of each parties, cash flow, roles and responsibilities and authority levels.

Which one is better?

Whenever you hire any employee you need to pay Social Security, unemployment, and Medicare taxes. Also, you might incur certain costs for benefits like health insurance or retirement plan. You aren’t generally responsible for those costs whenever you engage in services of the independent contractor. But, an independent contractor has less control and higher rate. You need to weight the benefits and drawbacks of each classification in order to decide what is good for your company’s requirements.

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