BMI (Body Mass Index) only considers weight and height, while body fat percentage directly measures the proportion of fat in your body. A 175cm, 80kg male has a BMI of 26.1 (overweight), but if he's muscular, his body fat might be only 15% (healthy range).
Men: 10-20% is healthy; Women: 18-28% is healthy. Athletes can be lower, but too low also affects health.
Use BMI for quick screening first. If BMI is normal but you're concerned about body composition, measure body fat percentage. Together, they provide a more complete health picture.