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In this video tutorial, Ben from Action Step explains how calculated merge fields work. These fields enable you to create new merge fields using PHP coding language. The calculations can be simple or complex depending on your PHP knowledge. To create a new calculated merge field, go 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. Finally, you can test the calculated merge field by searching for a record in your system.