TDEE

Hello everyone!
I recently calculated my TDEE and I'm still a little confused on how the whole thing works. My TDEE was 2198. So that's what I put into MFP for my daily calories. Someone has recently asked me if I remembered to subtract 20% from that number. I had no idea what they were talking about. If I subtract 20% would my actual goal for daily calories be 1759? And does that include when I work out? Or should I eat all the calories back on top of it?

Thanks for the help.