Starting with simple linear and branched alkanes and alkenes the method works by collecting a large number of experimental heat of formation data (see: Heat of Formation table) and then divide each molecule up into distinct groups each consisting of a central atom with multiple ligands:
: X-(A)i(B)j(C)k(D)l
To each group is then assigned an empirical incremental value which is independent on its position inside the molecule and independent of the nature of its neighbors:
* P primary C-(C)(H)3 -10.00
* S secondary C-(C)2(H)2 -5.00
* T tertiary C-(C)3(H) -2.40
* Q quaternary C-(C)4 -0.10
* gauche correction +0.80
* 1,5 pentane interference correction +1.60 
: in kcal/mol and 298 K
The following example illustrates how these values can be derived.
The experimental heat of formation of ethane is -20.03 kcal/mol and ethane consists of 2 P groups. Likewise propane (-25.02 kcal/mol) can be written as 2P+S, isobutane (-32.07) as 3P+T and neopentane (-40.18 kcal/mol) as 4P+Q. These four equations and 4 unknowns work out to estimations for P (-10.01 kcal/mol), S (-4.99 kcal/mol), T (-2.03 kcal/mol) and Q (-0.12 kcal/mol). Of course the accuracy will increase when the dataset increases.
the data allow the calculation of heat of formation for isomers. For example, the pentanes:
* n-pentane = 2P + 3S = -35 (exp. -35 kcal/mol)
* isopentane = 3P + S + T + 1 gauche correction = -36.6 (exp. -36.7 kcal/mol)
* neopentane = 4P + Q = 40.1 (exp. 40.1 kcal/mol)
The group additivities for alkenes are:
* Cd-(H2) +6.27
* Cd-(C)(D) +8.55
* Cd-(C)2 +10.19
* Cd-(Cd)(H) +6.78
* Cd-(Cd)(C) +8.76
* C-(Cd)(H)3 -10.00
* C-(Cd)(C)(H)2 -4.80
* C-(Cd)(C)2(H) -1.67
* C-(Cd)(C)3 +1.77
* C-(Cd)2(H)2 -4.30
* cis correction +1.10
* alkene gauche correction +0.80
In alkenes the cis isomer is always less stable than the trans isomer by 1.10 kcal/mol.
More group additivity tables exist for a wide range of functional groups.