There are many different ways to calculate body fat. Three common tests that are administered by a professional trainer are:
Bioelectrical Impedance: For this test, a low electric current is sent throughthe body. Muscle contains a lot of water, and water is a good conductor for electricity, so the current will sail through muscle until it gets to fat, which is not a good conductor. The machine takes this information to calculate your body fat percentage.
Skinfold Measurements: This test is the only one that depends on a human. A professional will use a set of calipers to take measurements from certain sites on your body. Some tests require three sites, while others can require seven sites. Typical sites for measurements are usually thighs, stomach, and arms. The person administering the test will take a fold of skin and fat and measure with calipers. These measurements get plugged into a formula, which computes your body fat percentage.
Hydrostatic Weighing: Of the three tests, this one is the most accurate. A person sits in a tub of water on a scale and submerges their entire body. All of the air in the lungs is blown out to give the most accurate reading. This test takes your underwater weight, and from that number your body fat percentage is calculated.
There are also popular at home weight scales for individuals to do on their own, but I would advise having a professional administer one of the above techniques.