The 95th percentile is a number that is greater than 95% of the numbers in a given set. The reason this statistic is so useful in measuring data throughput is that it gives a very accurate picture of the maximum traffic generated on an interface. This is a standard measure used in interpreting performance data. This 95th percentile is the highest value left when the top 5% of a numerically sorted set of collected data is discarded. It is used as a measure of the peak value used when one discounts a fair amount for transitory spikes. This makes it markedly different from the average.
The following example would help you understand it better.
The unit for threshold is based on the unit of the monitor ie., for all utilization monitors like CPU, Memory, Disk, Interface Rx/Tx etc., the threshold will be in percentage. For Rx/Tx Traffic, the threshold will be in bps (bits per second). For any other monitor like Free Disk Space in MB, the threshold unit will be in MB.