Retirement account contributions

Not quite.  In order to equalize the situation between W-2 employees (who pay half of social security and medicare, with the other half paid by the employer) and self-employed (who pay both halves through self-employment tax), there is an additional adjustment.  You have to subtract half your SE tax from your net profit.  For example, if your net profit is $10,000, your SE tax will be $1530.  That means that your eligible "compensation" for contributing to a retirement plan is $9,235.

Opus 17 is almost right.  Yes, your net profit must be reduced by the deductible portion of self-employment taxes.  However, Opus 17's example shows an incorrect amount of SE tax.  With $10,000 of net profit, SE tax is $1,413, the deductible portion of self-employment tax is $707, leaving $9,293 of net earnings available to support the retirement contributions.