The Floor Space Index (FSI) or Floor Area Ratio (FAR) is the ratio of the total floor area of buildings on a certain location to the size of the land of that location.
As a formula: Floor Area Ratio = (Total covered area on all floors of all buildings on a certain plot)/(Area of the plot)
Thus, an FSI of 2.0 would indicate that the total floor area of a building is two times the gross area of the plot on which it is constructed
Floor Area Ratio in zoning
The Floor Area Ratio can be used in zoning to limit the amount that can be built in a certain area. For example, if the relevant zoning ordinance permits construction on a parcel, and construction must adhere to a .1 floor area ratio, then the total area of all floors in all buildings constructed on the parcel must be no more than one-tenth the area of the parcel itself.
A builder can plan for either a single-story building consuming the entire allowable area in one floor, or a multi-story building that rises higher above the plane of the land, but which must consequently result in a smaller footprint than would a single-story building of the same total floor area. By combining the horizontal and vertical limits into a single figure, some flexibility is permitted in building design, while achieving a hard limit on at least one measure of overall size. One advantage to fixing this parameter, as opposed to others such as height, width, or length, is that floor area correlates well with other considerations relevant to zoning regulation, such as total parking that would be required for an office building, total number of units that might be available for residential use, total load on municipal services, etc. The amounts of these things tend to be constant for a given total floor area, regardless of how that area is distributed horizontally and vertically.
By Nilesh Shah