Wagga jobs, population and businesses 'stunted' by payroll tax, Joe McGirr tells Parliament.

Dr McGirr called on the NSW Treasurer Dominic Perrottet to forgo a "modest" amount of tax revenue and introduce concessions for regional businesses to help Wagga's population growth.

The NSW Treasury has maintained that it is supporting regional growth and providing drought relief despite Dr McGirr reading testimony from Wagga businesses about the tax burden in Parliament this month.

"'Payroll tax is the greatest disincentive to employ people that exists'," Dr McGirr told Parliament.

"Those are the words of Australian Transmission Components managing director John Wilcox from Wagga, who told me he could have employed another person with the amount he paid in payroll tax last financial year.

"Mr Wilcox is not alone."

Dr McGirr said he acknowledged the government was reducing the payroll tax level and increasing its application threshold to $1 million but said NSW "runs a poor third behind Victoria and Queensland's more competitive tax regimes".

A spokesperson for Mr Perrottet said the government had "delivered over $5 billion in tax cuts to NSW households and businesses" and was "continually examining ways to improve the tax framework to better support job creation and give local businesses more freedom to grow."

"In July the NSW Government lifted the payroll tax bracket from $850,000 to $900,000, and by 2021-22, the threshold will be raised to $1 million with up to 38.000 businesses saving up to $8175 off their tax bill," the spokesperson said.

Victoria has halved its payroll tax rate for businesses in regional areas but its threshold for charging the tax is lower at $650,000 in total wages per business.

Queensland has a lower payroll tax rate and higher threshold than in NSW.

In a speech to Parliament, Dr McGirr said he had been told by Wagga accountant Damien Molloy that "a number of businesses he knew had chosen to operate out of Canberra, which has a threshold of $2 million, specifically to avoid paying the NSW payroll tax".

Dr McGirr also referred to Wagga Laser Plumbing owner Greg Charleson as facing "a huge expense" from payroll tax and its "complicated" nature and rules around subcontractors meant "it was just easier to cap salary expenditure".

"In Wagga we now have a population growth target of 100,000 by 2038 but the payroll tax is not helping, it is hurting," Dr McGirr said.