How is EB N0 calculated?
Eb/N0 is equal to the SNR divided by the "gross" link spectral efficiency in (bit/s)/Hz, where the bits in this context are transmitted data bits, inclusive of error correction information and other protocol overhead.
Why is EB N0 used instead of SNR?
Its main advantage is that the actual bandwidth is taken out of the equation, since N0 is simply the noise power in a 1 Hz bandwidth. This allows comparing different modulation schemes without having to worry about their spectral properties. EbN0=SNBRb.