Magnetic stimulation is a non-invasive neurostimulation technique that can evoke action potentials and modulate neural circuits through induced electric fields. Biophysical models of magnetic stimulation have become a major driver for technological developments and the understanding of the mechanisms of magnetic neurostimulation and neuromodulation. Major technological developments involve stimulation coils with different spatial characteristics and pulse sources to control the pulse waveform. While early technological developments were the result of manual design and invention processes, there is a trend in both stimulation coil and pulse source design to mathematically optimize parameters with the help of computational models. To date, macroscopically highly realistic spatial models of the brain, as well as peripheral targets, and user-friendly software packages enable researchers and practitioners to simulate the treatment-specific and induced electric field distribution in the brains of individual subjects and patients. Neuron models further introduce the microscopic level of neural activation to understand the influence of activation dynamics in response to different pulse shapes. A number of models that were designed for online calibration to extract otherwise covert information and biomarkers from the neural system recently form a third branch of modelling.