Question on Fitness profile "Activity Level" and Workouts

On MFP in the profile, you can set your Activity Level to Sedentary, Lightly Active, Active, and Very Active. Does this differ from your workout routines?

Say I don't do much throughout the day but I workout for an hour+ every day. Does that mean my Activity Level in my profile should be set at Sedentary or Lightly Active? Or, if I don't do much throughout the day but still do a hard workout everyday, should it be set to Active or Very Active?

Of course I am recording my workouts and the calories I burn regardless of what my activity level is. Reason I ask is because I just noticed that when switching from Sedentary to Very Active, there is a 520 calorie difference which is definitely significant.

Thanks!