A payload refers to the fraction of mass considered as cargo in relation to the overall mass of a vehicle. For the term to make sense, the cargo has to be delivered from an origin to a destination. In spaceflight, origin and destination can be reference systems such as orbits, landing sites on celestial bodies, or the Kerbal Space Center.
Since the term cargo can comprise absolutely everything (including rockets), and even Kerbals (typical payload) have their own means of propulsion, the distinction between cargo and vehicle can be problematic. This further blurred when the launcher includes a partially emptied stage that will be retained to further propel payloads, or with asparagus designs that allow the engines of some payloads to participate in the launch. As all stock rockets except three haven't any engines, which are powerful enough, they can be described as payloads.
With stock parts, a rocket can deliver an inert payload of about 5-16% of its on-pad mass to low Kerbin orbit. The exact amount will vary with details of the rocket's construction and ascent profile. For higher orbits and other worlds, these numbers will drop rapidly with increasing delta-v. Real world rockets face even greater challenges, with payload fractions to Low Earth Orbit in the 1% range.