The NSW Business Chamber has started an online petition opposing the Labor payroll tax proposal.

Labor leader Michael Daley has committed not to increase payroll tax and keep it at current levels if elected in March.

The Coalition government has committed to change the threshold for businesses who start paying payroll tax from $750,000 to $850,000 this year then increases the threshold $50,000 each year, up to $1 million by 2021-22.

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Nationals candidate for Dubbo electorate Dugald Saunders said businesses impacted by Labor’s policy could lose almost $10,000 per year.

“The Nationals are opposing Labor’s proposal, payroll tax is an impost on business and we know that,” he said.

Director of HR, Finance and owner of Midwest Foods and Liquor Toni Alderdice supports the Business Chamber's decision to start an online petition and has urged Labor to reverse its plan.

"To not increase the threshold is a disincentive to employ or train more people and we employ more than 70 people," she said.

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"When the threshold goes to $1 million it will equate to an extra $13,000 a year for us, so not enough to actually employ someone but we'd use that money to train and to give more qualifications to our existing employees which is important to us.

“It’s been a pretty tough few years for small businesses across the region, so any help the government can provide is greatly appreciated."

However, Labor Candidate for Dubbo Stephen Lawrence said whilst the Chamber is legitimately putting a position out on behalf of its members the National Party is engaging in a scare campaign.

"This is an issue where the devil is in the detail," he said.

"Labor supports the current threshold remaining, the government is proposing to increase the threshold incrementally each year until 2021, this is a five and a half per cent tax that 90 per cent of small businesses do not pay, so the suggestion that this will be a job killer and have a dire impact on jobs is an untruth.

"The fact is, we want the status quo to remain and what Toni Alderdice has said perfectly illustrates Labor's point, which is, this is not a game changer this is a particularly small detail of fiscal policy." 

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But Western NSW Business Chamber Regional Manager Vicki Seccombe disagreed and said it is critical that governments and oppositions across the country look at measures to support jobs growth and small businesses.

“Payroll tax is the ultimate job killer – it penalises businesses for hiring more staff, and that is why the decision by the Berejiklian Government last year to lift the payroll tax threshold was celebrated across NSW," she said.

Mr Saunders is also supporting the online petition from the NSW Business Chamber opposing the Labor payroll tax proposal.