The move comes after Sheffield City Council became the first Core City and the only council in Yorkshire to offer a business rate discount to firms.
The discount currently sits at £8.25 per hour outside London, £1.05 more than the new minimum wage set by Government which comes into effect in April.
Sheffield City Council have been a Living Wage employer since 2013 and are looking to award up to £500,000 in discounts in a move to get more local businesses involved in the scheme.
Councillor Ben Curran, Cabinet Member for Resources at Sheffield City Council, explained:
“This is about people being paid a fair wage for the work they do.
“It’s a core element of our vision to create a more inclusive and prosperous economy in the city, where ordinary working people benefit.”
The council’s proposals involve offering a discount up to £5,000 off business rates for 201617 to up to 100 firms that become accredited with the Living Wage Foundation.
The move could see hundreds of local workers receiving a wage boost worth thousands of pounds each year.
The proposals are being developed and the scheme is expected to be introduced early in the new financial year.