Here, means the expenditure you spend on goods, labor earnings (which is ) stands for the hourly wage rate multiply the hours you work and means the non-labor income .
Wage rate plays a central role in the labor supply decision.
And now, suppose the workers have 2 uses for the time: work or leisure, and the total time allocated to each activity would be . So that
is the leisure time. Then the budget constraint would be
The intersection of the Budget Constraint and the Indifference Curve would be the combination that could maximize the utility. (See Utility Theory and Utility Maximizing Problem