Are you inquiring on where you can find it on Analytics? (average time on site is displayed on the 'Dashboard' under 'Site Usage', fifth result.) or how they calculate average time on site?
Average time in displayed under Dashboard area of your google analytics.if u dont have google analytics. you should add google tracking code to each of your website.
It is on front page of your dashboard under site usage. Time on site is one way of measuring visit quality. If visitors spend a long time visiting your site, they may be interacting extensively with it.But it is not always true.
Also you can just pop up open per-page statistics, and on the very top above the list it'll give you the averages.
Login with goole analytic and go on Dashboard there is option site usage where you can find average time on website.