For self-employed, your "compensation" is your net profit minus the deductible portion of self-employment tax. So about 92% of your net profit.
The reason is that for a W-2 employee, if they had $10,000 of wages, the employer has already paid an additional $765 for the employer's machining half of social security and Medicare tax. The employee "earned" $10,765 but only $10,000 is eligible as "compensation." That calculation applies equally to self-employed people who are the employer and employee at the same time. Your compensation does not include the "employer half" of self-employment tax.
