An independent tribunal last week approved a 20 per cent pay rise for mayors, 10 per cent for councillors and, for the first time, deputy mayors will be allocated "substantially" more than their fellow councillors.

For category two councils - which includes Warrnambool City, Moyne and Glenelg - the mayoral allowance will rise from $81,204 to $107,189 while councillors' allowances will increase from $26,245 to $31,756.

Warrnambool had no deputy mayor until the current council was elected, and when councillors made the decision to appoint one they stressed at the time it would not cost ratepayers any more because they received the same allowance as an ordinary councillor.

But the tribunal now says they will be entitled to get paid half what the mayor does - $52,255.

Acknowledging the pay rises were "significant", the tribunal had decided to phase them in over five years for mayors and deputy mayors and three years for councillors.

Deputy mayor Debbie Arnott said she was shocked when she was told about the pay rise on Friday and was surprised by the amount. "The deputy mayor's has increased substantially," she said.

Cr Arnott said the ruling wasn't very considerate to what the community had been through, and questioned the decision to award back pay to December. She said she wasn't sure yet what to do about it.

The first pay rise put the mayor on $96,470, the deputy mayor on $48,235 and councillors on $30,026 backdated until December 18 last year.

That means councillor allowances will cost ratepayers $318,244 each year - $80,000 more than now - when the full effect of the pay rises comes in in five years.

Category one councils such as Corangamite and Southern Grampians will see mayoral allowances rise from $62,884 to $83,007, a deputy mayor would get $40,466 and councillors would see their pay packets rise from $21,049 to $25,469.

Cr Ziegeler said the pay rise had automatically been applied and councillors had no say.

He said the amounts were set by an external body and had nothing to do with councillors "being greedy".

"The deputy mayor for the first time got a pay scale which is above the rate for an ordinary councillor and the mayor gets a fairly large lump," Cr Ziegeler said.

"Now I imagine it is up to each individual councillor whether they accept the pay rise and take it for themselves, that's entirely a voluntary thing, they don't have to accept it.

"I know for myself I won't be accepting it because I think that what the mayor gets is quite sufficient."

Cr Ziegeler said he was both surprised and embarrassed by the amount. "That's one of the reasons I won't be accepting the pay rise," he said.

The councillors last year voted to give themselves the top pay rate for their category but Cr Ziegeler said under the new ruling there was no longer any scope within the pay category to adjust allowances to a lower amount.

The ruling by the Victorian Independent Remuneration Tribunal, which was established in 2019, came after it was last year asked by the Victorian government to review the allowances.

The tribunal said most council members who responded to a questionnaire said their allowances were too low, but submissions from ratepayers and community groups strongly opposed an increase.

"The tribunal acknowledges that these increases are significant," it says in its determination.

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