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Labor=how much the client will pay you for doing the work.
The customer does't care if they allow you $1000 for parts and you spend $500 as long as their needs are met. Some will care if you go over, story missions use to allow you to go over some without any negatives. Not sure if it's still that way.
The difference is, in real life the builder could explain that even though your budget for parts is $1k, you wont need to spend the entire amount to get what you want. Obviously we can't do that in game. On the other end they could upsell you on more expensive things you may or may not need to generate more profit for themselves. Luckily we don't have to deal with that in game.
Budget=how much they want to spend on parts.
Labor=how much the client will pay you for doing the work.
despite my lack of understanding i am making slow profit and the game is fun that is all that matters!
Of course you don't give someone $1000 if you want to spend $500 on a pc.
Usually you tell someone: "I want to spend up to $500 on the PC. Do your thing, get me the PC, and I'll give you the money."
Same happens in-game.
Or in other words:
You want to spend $500 on a pc in real life --> Budget of $500 in-game
Budget of $1000 in-game --> You want to spend $1000 on a pc in real life.
Makes sense?
Budget is the maximum money you can spend to put together/fix the computer, before the customer gets cranky :)