http://www.duxcollege.com.au/hsc-scaling-i-49.html
That is a good link to learn about scaling and atar calculation.
Ill give a summary.
Firstly your raw HSC Mark is calculated via your raw external mark and raw school (hereafter internal) mark. The way THIS is calculated is via
moderation .
Once all of your moderated HSC marks are calculated. They take the BEST 10 units, and then add up the marks out of 50 per unit
i.e. 2 unit subjects (Chemistry, Adv English, 2U math etc.) are out of 100. And 1 Unit subjects (Engineering, 3U Math, 3U English etc.) are out of 50 (since they are 1 unit).
Then they add up your
best 10 units and add it up to a total of a number out of 500.
Then they compare your aggregate mark (out of 500), and compare it to the rest of the state's. Then they give you a percentile position relative to the rest of the entire cohort. e.g. If you scored a mark that put you into the top 5th percentile, your ATAR would be 95.00. If you had an aggregate mark out of 500, which beat 99.95% of the state, you are ATAR will be 99.95.
Also I might add, that it is due to the fact that they take your best 10 units that people pick 12 or even 14 units, that way they have backup, just incase. While someone with only 10 units, if they stuff one of their subjects up, they dont have any other units to take up its place.