Dimensional weight is a way for the couriers to calculate the maximum weight of a box based on its size. This is calculated based on a mathematical formula and is primarily based on the dimensions of the parcel. The courier will base the price of a shipment off of whichever is greater - the actual physical weight of the parcel or the dimensional weight. There is no need for you to calculate this, PaidShipping's system takes care of that for you.
Dimensional weight usually applies to larger boxes or lighter shipments.