A tax break for small businesses was proposed Tuesday.

Supervisor Mark Farrell wants companies with total salaries below $500,000 a year to be exempt from The City’s 1.5 percent payroll tax. Currently, the tax kicks in when companies expand their payrolls beyond $250,000.

If adopted, the legislation would amount to a $3,750 annual tax break for such businesses. Farrell said the tax reduction would stimulate hiring.

The moderate supervisor’s proposal was supported by progressive Supervisor David Campos, who said small businesses should not miss out on the help The City gave last year to larger companies moving into the mid-Market Street neighborhood.