The formula for men is:
%Fat=495/(1.0324-0.19077(log(waist-neck))+0.15456(log(height)))-450

The formula for women is:
%Fat=495/(1.29579-0.35004(log(waist+hip-neck))+0.22100(log(height)))-450

LOG refers to the logarithm with a base of 10, or LOG10, not that with a base of e, or LN. LOG(100) = 2.
The formulas require the measurements to be in Centimeters with the acurracy of 0.5 cm.
The American Council on Exercise uses the following categories based on percentage of body fat:

Lean Body Mass or Fat-Free Mass – This is derived by subtracting the calculated value of body fat from the total weight.

Lean Body Mass = Weight × (100 – %BodyFat)

Body Mass Index (BMI) – The BMI is the ratio of your weight to the square of your height. The number is proportional to your body shape. Generally, the number is small for thin people and large for fat people. People with a BMI 25 or greater are considered overweight, unless they have a very muscular body. The BMI does not consider the fat/muscle ratio, and a healthy, muscular individual with a low percentage of body fat may be classified obese using the BMI formula. This is a well-known deficiency of the BMI formula. If your BMI is 25 or greater, and your Waist-to-Height ratio is less than 0.5 and your Percent Body Fat is in the “athlete” or “fitness” category, you are probably muscular and not fat.

BMI does not take into consideration how the weight is distributed.
References:
J. Hodgdon, and M. Beckett, “Prediction of percent body fat for U.S. Navy men and women from body circumferences and height”. Reports No. 84-29 and 84-11. Naval Health Research Center, San Diego, Cal. 1984.