Yes, you are correct, the deferred wages that your employee contributed to his SIMPLE Plan should be part of your "wage" expense listed on Line 26 of your Form Schedule C.
So in your case, as described in your original question, your gross wages should include the amount from Box 1 of the W3 plus the amount from Box 12a (which would also be the amount listed for boxes 3 & 5 of your Form W3).
You are also correct about reporting your matching SIMPLE contribution on Line 19 of your Form Schedule C. In addition, you should report your Employer matching social security and medicare tax (FICA Match) and unemployment taxes paid on Line 23.
@Jaybee617
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