It is used two ways: as a test of strength, and as the reference number for percentage-based programming, where "5 x 3 at 85%" means 85% of the 1RM.
Testing it means warming up to heavy singles with three to five minutes of rest and stopping at the first rep where technique breaks. That is a risk for beginners, so most trainers estimate instead. The Epley formula is 1RM = weight x (1 + reps / 30): a set of 5 at 100 kg gives about 117 kg. Estimates are reasonable up to about 10 reps and unreliable beyond that. The one rep max calculator runs Epley and six other formulas side by side and turns the estimate into a percentage table.
Once you have the number, 70 to 80% covers sets of 5 to 8, and 85% and above covers sets of 1 to 3. Re-test or re-estimate every block; a 1RM from three months ago is a different person's number.