The first way is correct. You don't pull gold off of a hired monster unless specifically directed to. The rules state:
Quote:
Once all abilities on the hired Monster have been resolved, all gold that was committed to that Monster is moved from the DMZ to the stockpile.
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A monster does not care if you overpaid, they will happily take the amount of gold committed to the card to hire it. The Inhumane Society just lowers the number that would take to hire the monster by 1. That way, if you only have 2 gold left, you may still hire a 3 gold monster with that location in play.