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I have a calculated column in a list and I want to update that column value from SharePoint designer workflow but when I am trying to update the field in workflow, calculated column is not showing up in drop-down list of "update item" action.

Can you please assist that why it is not showing up and how I can update that?

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Calculated column value updates when you create a new item OR when you change/update the existing item.

You cannot directly update the calculated column from workflow or list forms.

Solution: You can change the values in another columns on which the calculated column is dependent. So that when you update the list item/columns, calculated column value will be recalculated automatically based on the formula and values in other columns.

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