You are currently viewing What is the difference between employee and employer
  • Reading time:9 mins read
  • Post category:Services
  • Post published:April 22, 2021

The words employment, employee and employer are quite common in commerce and entrepreneurship. It is needless to say that the existence of both parties is crucial for every business. Let us understand what is the difference between an employee and employer.

An employer and an employee deal in the exchange of services and they are dependent on each other. In order to run a business successfully, an employer would need employees. While employees rely on the former for financial support, growth opportunities and more.

However, there are some stark differences between an employee and an employer, which we are going to talk about in this blog.

A company or an organization can be called an employer. Similarly, a small or large business, a single individual, NGO, a government entity, a retailer, or a wholesaler can also be termed an employer.

Both the parties should agree to the terms and conditions of employment. There should be a contract that must be agreed to. We have given a detailed definition of this later in this blog.

On the other hand, an employee generally gets paid for the service he or she provides for the employer. It will depend on the company policy as well. There are several factors that both parties should agree to, such as salary, legal outlines, rules, etc.

An employee can be engaged to serve the organization or individual full-time or part-time as per compensation and rules. An employer can employ for weeks, months, or permanently. It depends on the work type as well.

Who Is an “Employee”?

A person/company who gets hired for a job is known as an employee. After careful consideration of profiles and going through exhausting interview processes, an employee gets a job. An employer typically appoints an employee for a certain job. In turn, he or she gets compensated in terms of salary and wages. If it is a full-time job, he or she also gets additional facilities.

It could be a part-time job as well. As long as he or she is getting paid by the employer in exchange for work, he or she is an employee. In this regard, it should be noted that employees shouldn’t exceed their terms with employers beyond the professional relationship. It should purely be a target-based/ goal-oriented relationship.

An employee is required to do the job, meet deadlines and goals and contribute to the company’s growth. He or she is responsible to make the company flourish.

An employee depends on the company as far as financial stability is concerned and they can switch from one job to another at their convenience (as long as it is not a contract-based one).

Based on their performance, employees even get bonuses, appraisals, perquisites, etc. An employee must try hard to stay in the employer’s good books. It will definitely increase their opportunity to grow in the company. An employee must always be eager to learn and have a healthy relationship with his or her employer.

Who Is an “Employer”?

Now coming to employers – an employer appoints an employee. It could be an individual or a company. It could be a small-scale or a large-scale company. The employer is responsible for providing CTC or salary to the employee. The employer should also provide a safe working environment to the employee along with other perks.

An employer should give good compensation and must praise the employee for good performance. An employer can typically belong to a private company, a government company, or an NPO.

He or she should define the terms of employment and establish the working culture for the staff.

They should behave well and trust employees. They must provide good compensation and create a healthy environment for maximum productivity.

An employer can obviously give instructions to its employees and motivate them to do better. They even have the authority to fire if the desired goals are not met. An employer should put in efforts to make a worker comfortable and take interest in the employee’s concerns.

It will definitely build a mutual relationship and the employee can trust and respect the company/individual.

Differences between Employee and Employer

Some key pointers show the differences between an employee and an employer.

  • Cash Flow – The income of one person is an expense for another. It is known as a cash flow system. In terms of employment, employer expenses lead to an employee’s income.
  • Objective – Both the parties depend on each other for existence. While the employee puts in his skills to get his salary; an employer wants to boost its productivity with the help of an employee.
  • Roles and responsibilities – While an employer provides protection to a working employee; an employee is obliged to meet goals and deadlines provided by the former. An employer is bound to provide CTC, healthcare benefits, pick and drop facilities and work safety to its staff.
  • Authority – In this regard, the employer has an edge over the employee as they can fire anytime they want. They can even control the employee and assign rules. On the other hand, the employee doesn’t have much power. They can, however, resign when they feel they are being exploited.
  • Goals – For mutual existence, they depend on each other but their goals differ. The employer tries to improve productivity, which in turn will lead to better profits. The employer tries to make the most of a hired employee’s knowledge and skill to maximize the productivity of that specific area. The employer also tries to eliminate errors, etc.

What is the difference between employee and employer

The employee finds a job and tries his best to provide services that are required by the company. He or she provides the services in exchange of a salary.

The employee gets financial support from the employer.

  • Restrictions – There are several lines that shouldn’t be crossed by both parties. This is necessary for a healthy relationship. This is a common blunder, which leads to toxic relationships within the workplace. These rules vary from one company to another. Romantic relationships between the parties are unhealthy and can cost the business a lot.

An employee must be very careful while talking or interacting with his or her employer as things can get ugly. This can also lead to favouritism concerns, loss of job, bad reputation, etc.

RoleProvides his or her services in lieu of money/ CTC.Hires an employee and provides them with compensation in exchange for work.
GoalTo learn and grow in the organization as well as earn handsome salaries for financial affluence.To maximize productivity with the help of its employees. The goal is to achieve targets and bolster profit margins.
Cash flowEmployees receive compensation in exchange for their workEmployers provide CTC to employees and it is seen as an expense.
ResponsibilityThe employee is responsible for loyalty towards the company he or she is working for. He or she must do the job with dignity and abide by the said rules.The employer is responsible for the health and welfare of an employee. Apart from providing financial support, he/she is also responsible for providing good working conditions to the employee.
ControlAn employee only has control over the people working under them as per designation.An employer has full control over its employees.


So these are the key difference between an employee and employer

How can they maintain their relationship?

  • Mutual dependency: As mentioned above, they are dependent on each other. They should have a balanced relationship so that the company, as well as the employee, gets the opportunity to grow and flourish together.
  • Mutual support: By providing the best support to each other, things can get better. Employers should financially support employees as well as motivate them. Acknowledgement, bonuses, etc. are great as well. They should be promoted if they qualify. This will help employers to gain confidence from employees.

This way, employees can trust the company and get motivated. They would provide maximum productivity. The workers must be willing to support the employer’s vision. An employee might have to work late during busy periods while an employer might have to grant leaves when required.

  • Clear communication: Clear communication works wonder in every relationship. The relationship should be transparent from both sides. The employee must have a transparent CV and must answer rightfully during the interview. Employers should be transparent about their work profile, designation, CTC, etc. Both parties must allow the other to have a better scope of growth.
  • Gratitude: This is yet another way to maintain a healthy relationship. They should have a sense of gratitude towards each other. Employers must appreciate their staff and their hard work. they must conduct annual functions, give away awards, etc. Employees should also be thankful when they get a handsome hike or bonus for their performances.

So these are the differences between an employee and an employer.


It is extremely important that you understand the differences clearly as they can be the driver for growth. Both the entities can benefit from each other with trust, handwork and understanding. Keep in mind that they should have a common goal and vision.

Irrespective of the differences between the parties, it is true that both are codependent on each other and if they work on the relationship, both have plenty of opportunities to grow.