The employee and employer difference lies in their roles and responsibilities within an organisation. The employee renders services to his or her employer in exchange for salaries or wages. Conversely, the employer provides jobs, offers the employee’s wages, and runs the business operation. Employee and employer differences relate to authority, decision-making, and work responsibilities. Understanding these terms helps students, job applicants, and entrepreneurs develop positive employee-employer relationships to sustain the successful operations of organisations.
Who is Employee?
An employee is employed by a company to execute specific tasks against a salary or wage. They contribute to a company’s success by doing assigned functions based on the employer’s instructions and following the company’s laid-down policies in a structured setup.
For example, a school teacher teaches in school, implements the curriculum followed, and serves the administration. A software engineer writes and supports an organisation’s programs as determined by project specifications from managers. A nurse cares for the patient in the hospital, aids the doctors, and ensures patient welfare. A retail chain store cashier records sales transactions, assists customers, and implements the store’s policies. A factory worker runs machines, composes products, and implements safety policies.
Features of Employee
Employees are key in any business as they will accomplish work that is assigned and add up to the operational functions of companies. They serve an employer who pays them wages and conducts jobs defined by a company’s policy.
- Serves under an employer: Employees carry orders from an employer or manager. They perform the given tasks according to organisational procedures.
- Receives salary or wages: Compensation is given as per the employment contract. Employers pay salaries on time, ensuring financial stability for employees.
- A definite work structure: Employees work according to job roles, hours, and organisation policy. They follow a routine set each day by the organisation.
- May receive benefits: Employees can get health insurance, provident funds, and bonuses from the company. Many organisations provide paid leave and retirement plans as well.
- Limited decision-making authority: They implement orders, not top business decisions. They concentrate on doing their job tasks without controlling firm strategies.
Who is Employer?
An employer is a person, company, or organisation that employs workers to undertake specific duties for a salary. The employer owns the business, pays salaries, and ensures the company runs efficiently.
For example, a school principal recruits teachers, develops policies, and ensures the school runs smoothly. A restaurant owner recruits chefs, waiters, and managers to manage daily activities and serve clients. A factory owner recruits workers to operate machinery and produce commodities while controlling costs and profits. A corporate CEO leads makes significant decisions and oversees departments to ensure business expansion.
Features of Employer
An employer is an essential factor in the running of a business. Employers hire people, make decisions, and manage the running of operations. They ensure their employees are paid equitably, operate within labour laws, and risk finances to grow their companies.
- Hires employees: Employers recruit people for various kinds of job roles. They pick different candidates according to skills, experience, and company needs.
- Provides salaries and benefits: The employer pays for an employee’s work and offers other incentives like a provident fund and bonuses. The employers ensure that timely payments are made to motivate employees.
- Makes key business Decisions: Organizations decide on company policies, long-term goals and strategies, and ways to achieve that success.
- Comply with labour laws: The employer has to comply with the labour laws regarding employee rights and safety in the workplace. They make the workplace safe and fair for all employees.
- Takes business risks: The employers invest in the company and bear financial risks. They manage expenses, profits, and market challenges to keep the business running.
Difference Between Employee and Employer
The difference between employee and employer is major concerning roles, authority, and responsibilities:
Definition
An employee is a person who works for a company or an individual in return for wages. The employer hires the employee to do a particular job by meeting the set terms and conditions. Employees are supposed to conduct their work according to company rules and guidelines.
An employer is a person or an organisation that recruits other people for various tasks. The employer provides wages, defines job responsibility, and enforces adherence to policies in the organisation. Employers can either be small business owners, managers, or large organisations.
Role
An employee supports a business by performing assigned duties. They focus on their job responsibilities and contribute to the company’s success. Employees follow instructions from supervisors and work within their given roles.
An employer takes care of all aspects of a business and builds it. He makes vital decisions, establishes company objectives, and assigns tasks to workers. Employers regulate everyday operations and plan how to improve performance and profits.
Decision-Making
A sole employee has lower decision making rights in the corporation. They follow the managers’ direction to perform their functions. Employees can also propose ideas but do not involve influential business decisions.
The employer has complete decision-making authority. They determine company policies, create business strategies, and decide on hiring and budgeting. Employers accept responsibility for choices that affect the success of their firm.
Financial Risk
An employee does not face financial risks while working. They receive a fixed salary or hourly wage irrespective of the profits or losses that the company is facing. They do not need to worry about business expenses and investments.
An employer incurs financial risks to ensure that the business is running. Money is invested, salaries are paid, and running costs are paid. When loss is realised in the company, the burden falls upon the employer, and the employees continue receiving their wages.
Salary & Benefits
Employees earn a salary, an hourly wage, or a commission for their work. They also may receive health insurance benefits, bonuses, and paid leave. Employees depend on their employers for financial stability.
Payment of salaries and issuance of benefits fall under an employer’s duty. An employer determines how workers will be paid, including bonus policies and other welfare benefits. An employer pays salaries on time and adheres to labour laws.
Work Responsibility
The job role defines the way an employee carries out assigned work. They perform routine duties and meet the deadlines since they report to the supervisors. They concentrate on the specific jobs at hand rather than the whole business.
An employer gives tasks and monitors the progress of the company. They ensure employees are operating efficiently and business operations are running smoothly. Employers own up to business growth and prosperity in the long term.
| Aspect | Employee | Employer |
| Definition | Works for wages under an employer. | Hires employees for work. |
| Role | Completes assigned tasks. | Manages business operations. |
| Decision-Making | Has limited decision power. | Makes key business decisions. |
| Financial Risk | Faces no financial risk. | Bears business risks. |
| Salary & Benefits | Earns wages or salary. | Pays salaries to employees. |
| Work Responsibility | Works on given tasks. | Assigns tasks and ensures growth. |
Employee and Employer Relationship
An employee and employer relationship is based on mutual responsibilities and agreements. A good relationship guarantees business success and a productive working environment.
An employment agreement is an agreement that an employee and an employer sign. It indicates the salary, working hours, and job responsibilities. This kind of agreement lets both parties understand their rights and obligations. An employer must also provide a safe and productive working environment. The employer equips employees with proper tools, resources, and comfortable workplace space. Good communication between employers and employees keeps work flowing and prevents any kind of miscommunication.
Labour laws govern the way employers treat employees fairly. Such laws regulate wages, work hours, and safety at work. Employees receive payment for their work, while employers enjoy their skills and efforts. A strong employer-employee relationship will result in greater job satisfaction and better productivity. Businesses thrive when both parties respect each other and work in tandem.
PF Contribution by Employer and Employee
Contributions of PF by employer and employee are part of the employee benefits in India. Provident Fund is a retirement savings scheme where employees and employers contribute a percentage of the employee’s salary.
| Component | Employee Contribution | Employer Contribution |
| Percentage of Salary | 12% of basic salary | 12% of basic salary |
| Goes to EPF Account | Yes | Yes |
| Pension Scheme | No | 8.33% of employer’s share goes to Employee Pension Scheme (EPS) |
| Withdrawal Possible | Yes, under certain conditions | Yes, under certain conditions |
Employee and Employer Difference FAQs
1. What is the difference between Employee and Employer?
An employee does work under the employer on a wage basis. An Employer hires the workers and pays wages to employees.
2. How employee share differs with employer share under PF?
The difference between employee and employer share is that the employee contributes 12% of the salary to PF, while the employer also contributes 12%, and 8.33% is paid to the pension scheme.
3. What is the employee and employer meaning?
An employee is a person who works for a salary under an employer. An employer is a person or company that hires employees for work.
4. What is the PF contribution by employer and employee?
The PF contribution by employer and employee is 12% of the employee’s basic salary. The employer also contributes to the Employee Pension Scheme (EPS).
5. What is an employee and employer relationship?
The professional connection in which an employer hires an employee assigns work, and gives a salary for services is called the employee and employer relationship.
