Search engines use specific rules when calculating keyword density. They ignore words often known as filter words. This calculator tries to mimic the search engines as closely as possible, while keeping in mind that this is not an exact science.
This keyword density analyzer ignores all one and two letter words, as well as the following:
head, html, meta, table, title, and, but, for, from, here, her, his, how, not, than, that, the, them, then, these, they, this, was, were, with.
It is also not case sensitive. It will use part words if they are part of a plural, but won't if the word appears in the middle of another word of a different meaning.
The live keyword analyzer also rounds the percentage. This was done on purpose to simplify life.
If you want to find out how this tool really works. Clik here: Live Keyword Analysis.