It is calculated by integrating bulk density from the surface, with an estimate for the shallow section a density log does not cover. In a relaxed sedimentary basin it is often the largest principal stress. Where tectonics have compressed the basin, a horizontal stress can be larger, and the overburden is then the intermediate or even the smallest stress.
The number is a psi at a true vertical depth, or a gradient in psi per foot. Pore pressure is not part of it; pore pressure acts inside the pores, and the effective stress the grains carry is the overburden minus the pore pressure, in the simplest statement. Using a measured depth in the integration, in a deviated well, overstates the weight of the column.