It's basically in terms of exponential cost.
Say you steal a guy's soyburger that costs 10 nuyen. That gives you a heat rating of 1 with that person and his/her affiliates.
Now you'd have to continue to do stuff costing in total of 100 nuyen to raise it to 2. 1000 for 3, 10000 for 4, 100000 for 5, 1000000 for 6, and so on. Corporations keep track of even heat ratings of 1, but they aren't going to send out the hitsquad because you stole a box of ketchup packets, but once you head into the 5+ range, you start to piss some one off royally. These numbers can be modified to fit your game specifically with a multiplier (x2, x10, x20, depending on how you want to regulate it) This isn't necessarily direct material value, either. If you embarass someone in public and cost them a job or a huge business deal, you might see the heat rating from the loss of all that money.
Heat Rating acts like prejudice in someones eyes. Effectively, you are a liability, you've done some damage, stole a car, killed a goon (depending on what price you put on good goons) and trusting you is a problem. However, just like racial prejudice, Heat can be alleviated with a good Charisma roll temporarily. The only way to permanently reduce heat is to make some profit for that person. However, this shouldn't be used so mechanically that a player can kill a person's family brazenly and then buy them some drinks and it'll all be okay. Some people are priceless. Killing lovers, family members and close friends can earn you a Heat rating of 10 making any reasonable discussion impossible, regardless of how charismatic you are.
Heat is not entirely mechanical, it should be used as a litmus for character interactions, and is not necessarily set in stone.