Parallax error occurs when a person's line of sight is not properly lined up to take a measurement
The water level above needs to be measured.
If a person looks down from above, the level will appear to be higher than it actually is, and if the person looks from below, the water level will appear lower than it actually is. The level should be measured by looking at it horizontally.
It can sometimes be impossible to line up your line of sight properly, so parallax error cannot sometimes be avoided. It may be possible to correct for this error or estimate it's magnitude, but it is always preferable to avoid it if possible.