The atmosphere of a planet plays a major role in habitability, affecting your people's happiness and health.

The atmosphere is comprised of 5 gasses and atmospheric density.
Pure oxygen, O2. We need to inhale it, but we don't want too much of it cause then everything will spontaneously combust, including the oils we sweat out. 21% is perfect but we can tolerate as low as 15% or as high as 25%.

We exhale it, we really don't want to inhale it. Any non negligible amount is already annoying. We can survive prolonged exposure to about 0.5% but we really won't be happy or healthy while doing so.

Careful, pure hydrogen makes things go kaboom real quick if there is any oxygen. Over 10% hydrogen means there is a significant amount of pure hydrogen, the rest is in the form of moisture. This means that if hydrogen is above 10% the atmosphere will be unsafe, even with 0% CO2 and 21% oxygen. The ideal is 0%.

Atmospheric nitrogen is fairly inert. Realistically it is a major component for defining fertility but that is not in the game... yet. The ideal level is whatever you need to make sure oxygen is at 21% and CO2 and hydrogen are at 0%. We have defined it as 78% as that is what earth roughly has.

Argon is inert, more so than nitrogen. Argon isn't just argon, it represents all the atmospheric gasses that have no impact on whether or not we can breathe the atmosphere. We have defined the ideal level to be 1%, which is roughly what earth has.

Air needs a certain density for us to effectively exchange gasses in our lungs.
We express it in an arbitrary value where 100 is ideal. We can handle as low as 30 and there is no upper limit. However, breathing thin or thick air is really nasty, your people won't like it.

Atmospheres used to have classifications, no numeric ranges of certain gasses or atmospheric pressure. We have kept this classification for historic reasons but also to make it easy so see what you're dealing with. If it is classified as oxygen you know it is safe to breathe. Even 100% oxygen will not be classified as oxygen but as alien because the oxygen classification simply means safe to breathe.

An Oxygen atmosphere is safe to breathe.
A Carbon Dioxide atmosphere is obviously not safe and will require a LOT of terraforming to get to safe levels.
A Nitrogen atmosphere is usually fairly close to safe and won't require much terraforming.
A None type atmosphere is an unsafe atmosphere with an atmospheric density below 40. If you have near oxygen conditions but too low pressure then it is actually really easy to terraform into oxygen.
An Acidic atmosphere is fairly rare, it is a particular blend of high CO2 and some nitrogen or hydrogen. It really is a CO2 atmosphere but the classification still exists for historic purposes and for... spoiler... the chance to have a certain point of interest.
A Hydrogen atmosphere is unsafe but can be fairly easy to terraform. If you have low enough CO2 then all you need to do is get hydrogen below 10% to get a save atmosphere.
An Alien atmosphere is one that doesn't match any other classification. These are wildcards in terms of how easy to terraform it is, check their compositions to know what you're dealing with.

Oxygen between 15 and 25%.
CO2 below 0.5%
Hydrogen below 10%
Atmospheric density above 30
That's it.

A Terraformer can be used to change the atmosphere composition, thus reducing the penalties to health, happiness, and habitability.