After being served a record low rate peg of 0.7 per cent, TRC applied for a special rate variation in April for a 1.3 per cent increase, bringing overall charges to two per cent.

TRC mayor Russell Webb said the "small rate rise" will allow the council to continue to service the community.

"We are now where we originally should have been had IPART not got involved and just ordered what was needed in terms of rate rises across the state," Cr Webb said.

"If we are going to continue to service the community and meet some of their needs, we don't have any choice but to increase rates and meet those needs."

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But Tamworth Ratepayers' Association vice-president David McKinnon said what has been coined a 'small' increase will leave many feeling the pinch.

"It's certainly not tiny to the average ratepayer," Mr McKinnon said.

"You've got to realise that at the moment we're running on hot inflation, we're running at higher interest rates and massive energy bills.

"I see this as hurting them [residents] further."

On average, the decision will equate to a $1.60 weekly rate rise for residents, and $3.72 for businesses.

Cr Webb said while he recognises "people don't like getting rate rises" the formula used to determine the 0.7 per cent peg was "somewhat flawed" and almost impossible to budget with.

With the rate rise of two per cent residents can expect to see the implementation of projects that will be set out in the council's community strategic plan, which includes the improvement of the road network.

Cr Webb said while the increase is welcome, it still doesn't go far enough.

"The rate rise that we're getting doesn't even cover our projected salary increases and insurance increases for the council," he said.

Meanwhile, Gunnedah residents will also face higher charges, after IPART approved a rate increase of 2.5 per cent (including the rate peg) for the shire.

Gunnedah Shire Council (GSC) was originally given a rate peg of 0.8 per cent, due to a population factor, and applied for a special rate variation due to concerns they would be unable to deliver and maintain services in the community.

GSC mayor Jamie Chaffey said the outcome was a "common sense approach" from the independent pricing watchdog.

"If this decision from IPART had not come forward and we were stuck at 0.8 per cent instead of annually what we do at 2.5 per cent, we simply would not be able to provide the level of services that our community desire," Cr Chaffey said.

For Gunnedah residents, the variation will equate to an extra 27 cents a week for those living in residential areas, and 35 cents for those on rural properties.

Council had previously said that without the 1.7 per cent variation on top of the rate peg, it would have been out of pocket some $236,000 in revenue for the coming year, and $2.65 million over the next 10 years.

"It's important that we have a stable and balanced budget," Cr Chaffey said.

The maintenance and provision of the town's libraries, waste collection, parks, roads and water supply are all expected to go ahead as budgeted for.

"They're critical services for our community and community safety and if we don't have the funds we simply can't provide that service."

Cr Chaffey said while it was a "good determination" it still falls well short.

Special rate variation applications were approved for 86 NSW councils.

Local Government NSW (LGNSW) President Darriea Turley said it was an acknowledgement of the dire financial situation created by the initial decision to cap rate rises at 0.7 per cent.

Elsewhere across the region, Armidale and Uralla councils will increase rates by a total of 2.5 per cent; both Glen Innes Severn and Inverell councils have been approved for a 2 per cent increase; and Moree Council has had its 0.7 per cent cap lifted to 2.28 per cent.

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