The calculator works out the cash value of each pip of movement in a market given a trade size. For example, if you are trading EUR/USD on a USD account, and your trade volume is 2 lots (200K), then each pip of price change is worth $20.
You choose your deposit currency, the market you are trading, and a trade volume which can be entered either a number of lots, such as 0.40, or as a notional value, such as 40,000. The calculator then shows the pip size for that market, such as 0.0001 or 0.01, and the profit/loss which you will see from each pip of movement in the market's price.