Councillors at Mendip District Council have decided not to increase their allowances despite a recommendation from an independent panel.
The Independent Remuneration Panel proposed a £600 increase to the councillors' £3,605 yearly expenses.
Councillors at the Conservative-led council also agreed not to increase the leader's Special Responsibility Allowance from £10,000 to £12,000.
A 14% cut in government funding means the council must save a total of £2m.
The council employs just under 200 staff and has a budget of £16m.
It announced last week that 23 jobs would go after it set its budget for the next financial year.