Percent literally means per 100. Whenever you see the word percent, or the symbol %, take whatever is before it, and put it over 100.
So 125% = 125/100. That can be reduced to 5/4.
To convert to a decimal, you can do long division, dividing 5 into 4. Or, you can realize 5/4 = 1 and 1/4, = 1.25.
125/100 is easier to see as a decimal. 125/100 = 1 and 25/100. "25 hundredths" is written down exactly as it is said 0.25, with the digit 5 in the hundredths place of the decimal. So 1 and 25 hundredths is 1.25.