Water is classified as fresh or saltwater based on its salinity, which is the amount of dissolved salt and other minerals in the water. Freshwater has a low salt concentration, generally less than 0.5 parts per thousand (ppt), while saltwater has a high salt concentration, usually around 35 ppt. Other parameters that can be used to classify water include temperature, pH, and dissolved oxygen levels, but salinity is the primary factor that determines whether water is considered fresh or saltwater.