State government data shows 377 businesses shared in the savings.

The payroll tax was cut to 2.425 per cent in 2018.

Read more: Bendigo business welcomes budget tax cut

From July 1, 0.4 percentage points will be cut off the tax rate, until 2022-23.

The payroll tax applies to businesses that exceed a monthly threshold of $54,166.

Businesses are eligible for the cuts if 85 per cent of their wages are paid to employees working in regional areas.

Member for Bendigo West Maree Edwards said one of the biggest imposts on small business in regional communities was the payroll tax.

Ms Edwards said the change would make a significant difference to the bottom line of many Bendigo businesses.

"It means that our businesses can have the confidence that the state is supporting them. And also that it means they have the security for their staff," she said.

"Regional employers struggle a bit more than their metropolitan counterparts ... This is about supporting regional employers so they can continue to employ people in regional areas."

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