No, you are not responsible for the extra tax money if you repay the overpayment because, as you you correctly indicate, you were not paid the money in essence--ergo, you don't owe taxes on it. You only owe taxes on income actually received, not on mistakes you corrected, and the company needs to make you whole so that you do not come out behind--you should net out to exactly where you would have been had you been paid the correct amount in the first place.