Mayor Naheed Nenshi has said that he will donate ten percent of his annual paycheque, approximately $20,000, to the city or charities doing work in Calgary.

Nenshi made the announcement on Monday morning before going into meetings at City Hall.

Councillor Andre Chabot tried to tie the raises to the increase in the Consumer Price Index but the motion failed.

Chabot was looking to have the annual wage increase lowered from 5.35 percent down to 3 percent and says the number more adequately reflects local salary increases.

Councillors voted to accept the 5.35 percent pay raises and will now earn an annual salary of $107,000.

The new salaries will make them the third highest paid councillors in the country.

The Mayor will now earn $201,800, making him the highest paid mayor in Canada.

Mayor Naheed Nenshi says he is not comfortable with the compensation so he is donating 10 percent.

"It really is a drop in the bucket in a three billion dollar budget, where perhaps it could have more impact with an organization that is doing real grass roots works in the community," said Mayor Nenshi.

Councillors Chabot and Farrell say they will follow the Mayor's lead and also donate part of their salaries.

The salary increases are tied to the average weekly earnings of Albertans.

"We feel that the average weekly wage index is more directly representative of what is happening in Alberta and as a link, or as a determinant of what council should use, we think is more appropriate than just cost of living," said Ross McDougall from the Compensation Committee.

Council did look into giving the increases back to the city but were advised that it would be difficult unless they all agreed to the same salary cut.