Correct, you count models unless it is a single unit.
*When to Test* As units take casualties their psychological well-being deteriorates and they will be pinned by enemy fire or flee from the battlefield. There are two times when a unit must take a morale test to see if it continues to fight:
• Whenever it takes wounds that leave it with half or less of its starting size or tough value (for units with a single model). • Whenever it loses a melee fight.