There are basically two methods to calculate efficiency of the boilers : Input-Output method and Heat Loss method. In Input-output method, boiler must be in steady running condition and the data of heat input in the form of  fuel and air and heat output in the form of steam and other losses is taken.

Here we are going to discuss the second and more popular method. In this method, first we calculate the heat input. Then all heat losses are calculated. Effective heat output is heat input less the heat losses. Output to Input ratio gives the efficiency.