Your reimburse for gross pay because you received gross pay, or at least, the benefit of it: part of the pay went to the IRS to satisfy your tax liabilities (e.g. the various forms of withholding) and unless you repay it, you have the windfall of having your employer pay part of your taxes for you. A simple example: let's say that you pay 20% of your income in taxes. Say that you should have received $50,000 in gross pay and had the 20% you expect to owe withheld, which means that you would have $10,000 in taxes paid to the IRS for you and received $40,000 in net pay.Now let us assume that you were accidentally paid an extra $5,000 gross: $1,000 to the IRS, $4,000 net to you. Say you return only the net ($4,000 of the $5,000): in this case, your gross pay is $51,000 (the $50k you should have received, and the $1k accidental overpayment of withholding, which you did not return). That means that at a 20% tax rate, you would owe $10,200 in taxes. But a total of $11,000 was paid for you: the $10,000 withholding on your correct wages or salary, and the $1,000 withholding on the overpayment, which you did not return. If you owed $10,200, but $11,000 was paid for you, you will get an $800 refund due to the ovepayment of taxes--so you will get $800 to which you are not entitled. This is  an simplified example, but it shows why you have to return the gross, not net.