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In this tutorial, Ben from Action Step explains how calculated merge fields work in the system. These fields enable the creation of new merge fields using PHP coding. The complexity of the calculations depends on your PHP knowledge, but even simple codes can be beneficial. To create a new calculated merge field, navigate to admin document templates and click on the list of merge fields. You can edit existing merge fields or create a new one by giving it a name and description. The calculation code is where you enter the PHP code for the merge field. The next option allows you to test the merge field by searching for a record in the system.