Points are given for how well each driver does in a race. The one with most points at the end of a season is World Champion.
There's another prize for the people who make the cars - constructors.
They add together the points their drivers have and the one with the most wins the Constructor's Championship.
The number of points for each place in the race is:
1st 10 pts
2nd 8 pts
3rd 6 pts
4th 5 pts
5th 4 pts
6th 3 pt
7th 2 pts
8th 1 pts