I would say to always be as professional and polite as possible. Never let them realize you know that they are actually flirting or you can just ignore the flirt without being rude. I think after a while they will get the message.
If he/she comes all out and say what he/she feels then you have to let them know that you would rather, for both your sakes and the sake of the business, it be better that your relationship remain strictly professional. You must explain that having a relationship with the boss can only spell trouble on several levels:
(1) Other employees may lose respect for the boss and you
(2) Customers will start to feel uneasy if they get to know what's going on
(3) It could be distracting to you to have a relationship in the office
(4) If the relationship does not work out it would be almost impossible to work together
(5) your job is very important to your and you would not like to jeopardize that