Employers in Hounslow paying the London Living Wage could see their business rates slashed by up to £5,000.
Firms across the borough can now apply for the one-off discount, equivalent to five-times the cost of accreditation by the Living Wage Foundation. The offer will be available until March 31, 2018.
Councillor Theo Dennison, Hounslow Council's cabinet member for finance, said: "London is a world class city but it's also massively expensive, which leaves many people in the capital struggling to make ends meet.
"That's why it's so important firms pay the London Living Wage, and why we are giving a helping hand to those who do."
The London Living Wage, defined as the minimum needed to afford a decent life in the capital, is currently set at £9.15 an hour.
Hounslow Council already pays all its employees the London Living Wage and requires all contractors to do likewise.