In baker's percentage, the combined weight of all flour is 100%, and each other ingredient is measured against that flour weight. A dough with 500 g flour and 350 g water has 70% water, or hydration; the ingredient percentages do not have to add up to 100.
This makes formulas easy to scale. Count the flour and water inside a levain or other preferment when calculating the final dough's hydration.
Reference: Further reading.