Labour power or labour-power (Ger: Arbeitskraft) is the capacity of people to work. The expenditure of labour power consumes energy, and it must be constantly reproduced. The amount of labour needed to reproduce labour power is called necessary labour. In a sufficiently productive society, labour power produces more than it needs for it to be reproduced, and surplus labour arises. The aggregate surplus labour of society as a whole is called the surplus product, as opposed to the necessary product, which is just the labour needed to reproduce labour power. The surplus product may be used to improve the means of production, to produce luxury goods, or to sustain those in society who are not producing.
In societies with the commodity form, where labour takes the form of value, labour power becomes a very important commodity. Its use-value is the ability to produce value, and its value is given by its cost of reproduction, which in turn depends on the value of basic necessities.
In a capitalist system, the bourgeoisie own the means of production, leaving the proletariat unable to subsist on its own and forcing the workers to sell their labour power to the capitalists in exchange for monetary wages. These wages, however, only account for necessary labour and not the total labour contributed, giving rise to exploitation. This surplus labour produces surplus value, which the capitalist appropriates. Therefore, the longer the workday and the greater the productivity and intensity of labour, the more surplus value the capitalist can extract. Wages also depend on factors such as skill level, supply and demand, and the bargaining power of the proletariat.
In a socialist society, there is no longer a capitalist class. As a consequence, workers are compensated for the full value of their labour, and exploitation is abolished. Some deductions may be made in order to provide certain services to those who need them.
As a commodity
"Labour-power can appear upon the market as a commodity, only if, and so far as, its possessor, the individual whose labour-power it is, offers it for sale, or sells it, as a commodity." 
The free labourer confronts the owner of money on the market because he requires subsistence and lacks the means of production. "[T]he labourer instead of being in the position to sell commodities in which his labour is incorporated, must be obliged to offer for sale as a commodity that very labour-power, which exists only in his living self." 
The value of labour-power is determined, as in the case of every other commodity, by the labour-time necessary for the production, and consequently also the reproduction, of this special article. So far as it has value, it represents no more than a definite quantity of the average labour of society incorporated in it. Labour-power exists only as a capacity, or power of the living individual. Its production consequently pre-supposes his existence. Given the individual, the production of labour-power consists in his reproduction of himself or his maintenance.
For his maintenance he requires a given quantity of the means of subsistence. Therefore the labour-time requisite for the production of labour-power reduces itself to that necessary for the production of those means of subsistence; in other words, the value of labour-power is the value of the means of subsistence necessary for the maintenance of the labourer. Labour-power, however, becomes a reality only by its exercise; it sets itself in action only by working.— Karl Marx, Capital Volume One, Chapter Six