In theory you should top off to the correct OG. However, if it's an extract kit designed for 5 gallons, 5 gallons should be the correct OG. As long as you get your volumes right and add all the fermentables you're supposed to (ie don't forget to add something and don't add anything extra), the only way it'll be off is if whoever supplied the kit/recipe messed up.
Top-off water makes getting an accurate reading very difficult if not impossible. What you could do is take a gravity reading after you chill the wort, but before you top off. With that gravity reading, and the volume of the wort prior to top off, you can do some very easy math, and either know what your gravity at 5 gallons would be (accurately), or figure out exactly where you need to top off to in order to hit the OG you want.
Yes. In the case of topping off with water, in an extract batch go by the volume, YOUR GRAVITY WILL BE CORRECT even though your hydro reading doesn't appear to be. Read this.
Attention new brewers, yes your original gravity reading is wrong. Don't panic.
Extract brewing is FOOLPROOF, top off to your correct final volume and the real gravity will be correct.
The magic of brewing is that Volume and gravity are dependent on each other.
Your beer is exactly stronger by the amount of water you are missing, so if you make it up with water, then the gravity will correct itself. And in the case of extract, all you have to top off to the target volume, you don't njeed to figure out how much, just top it off.
Same if you have to high a volume of water, your beer is exactly weekend by the amount of water you over shot. You can fix that by boiling further to concentrate the wort to the volume you need. (this is more for AG brewing.)
Every brewing software has a tool called a dillution calculator to help people figure out how much water to top off, when the miss their gravity in all grain brewing. If you plug the numbers of even an extract batch into the software you will see how this corrects itself.
It happens all the time. When you calculate your gravity of your current volume and you then use the dillution tool in beersmith to calculate the gravity after toppiing it off with the amount of water you are missing, you almost always come back to what the original gravity should be. I've topped off when necessary and the beer indeed has turned out fine.