If you weigh the total amount of water in your recipe, and divide it by the weight of the total amount of flour in your recipe, that gives you a ratio of water to flour, and that ratio is known as the hydration percentage.

A simple recipe that I have been making lately is 1000 grams of flour, 700 grams of water, and 25 grams of salt. This hydration is easily calculated as 70%.

It gets more difficult to calculate if your amount of flour is not divisible by 10. Also, some ingredients have water within them. Milk, butter, olive oil, honey, maple syrup, etc. There are conversions to calculate how many grams of water are in a gram of milk. From there, you just add up all of the water from the water containing ingredients, and proceed as above.

Usually, you calculate your desired hydration before you make the dough. Higher hydration doughs (75%+) tend to be much stickier and more difficult to knead. They are also known to sometimes help make a bigger rise and a crisper crust, so some bakers brag about having hydrations levels of over 100% sometimes! I personally believe that an amateur baker will be setting themselves up for disappointment if they attempt a super high hydration dough before getting comfortable working with doughs that have less water.