There are several ways, but lets take a look at 2 of them:
1. Using wordpress dashboard
You can achieve this by clicking on the “Appearance / Themes” tab and then click on “Add New” option.

After that a new page will appear, where you can upload your theme from your computer (upload theme button), and it should be in .zip format (or .rar as far as i know). After the upload all you need to do is activate the theme.

You can also install one of the free wordpress themes by typing the themes name in the search form on the same page.

After you choose your theme do not forget to activate it!

2.FTP installation

This option requires a bit more work and an FTP client/program, such as Fillezila as well as the required logins. In this case we do not upload compressed theme(.zip) but rather the extracted folder contained within it. All you need to do then is to upload that folder to your site. The location where you should upload it is the Themes folder (located under WP-CONTENT folder).

Dont forget to activate your theme after the upload!