How did Marx explain the idea of surplus value?

In his analysis of the capitalist system, Karl Marx defined surplus value as the difference between the value created by a worker and the wages they receive.12

Drawing on the labour theory of value, Marx argued that human labour is the sole source of economic value. In a capitalist framework, a worker is paid only enough to cover their means of subsistence—the cost required to reproduce their labour power. However, the worker continues to labor beyond the time necessary to produce this equivalent value. The value generated during this additional time is "surplus labour," which the capitalist appropriates as "surplus value".12

Marx posited that this process is inherently exploitative, as the capitalist—who owns the means of production—retains the new value created by the laborer. He argued that this appropriation is the mechanism by which capital accumulates and profit is realized. Ultimately, Marx viewed this dynamic as a fundamental contradiction of capitalism, leading to systemic instability, declining rates of profit, and the eventual necessity of a transition to a new economic system.2