It's kind of hard to explain, so here is a screen shot of the formula. It works in three parts. 1) Average points scored divided by 25 (max points possible). 2) Average positions gained or lost per race 3) Average qualifying minus 1. #2 is divided by #3. That total is added with #1 and that total is divided by the number of races completed, so currently it's 7.
Through some changes, I do not count results for drivers when they have a mechanical failure or are taken out by another driver. For the most part it works, but there some fixes that need to be made.