Business Hours are working hours of your company. You can setup Business Hours from Ticket Management -> Business Hours. You can Add New or Edit already setup hours. You can select 24x7 OR you can setup different hours for each day of the week. Business hours will be used to calculate SLAs.
Calendar hours are regular full-day hours and they cover everything round the clock. If you are promising your customers 24x7 support, you should be clocking in Calendar hours instead of Business Hours in your SLA Policy. Calendar Hours are more suited for high priority and urgent priority tickets, which require immediate attention from your team, even if it's a weekend or a holiday.
For example, if a ticket is due in six hours on a Friday evening and if the SLA is in business hours, then you are good to resolve it on Monday whereas if it is in calendar hours, then its better to resolve it immediately for a neat SLA report.