If council workers accept the current pay offer it could place a further £1.6 million pressure on Perth and Kinross Council.
PKC budget holders have been told to "tighten their belts" as PKC already faces a projected £2 million overspend on its 2022/23 revenue budget - not counting this £1.6 million pressure.
An update on the Revenue Budget 2022/23 was provided to councillors last week.
The council's chief accountant Scott Walker provided the update to PKC's Finance and Resources Committee on Wednesday, September 7.
Mr Walker said: "We are asking all budget holders to review their expenditure, tighten their belts and minimise all non-essential expenditure."
Councillors were also advised as to the impact of pay negotiations on council finances.
PKC's chief accountant said: "Our understanding is that the unions involved in the single status negotiations have recommended accepting the package that was announced at the start of this week and are undertaking consultative ballots.
"Teaching unions are currently undertaking a consultative ballot over an offer of five per cent but recommending rejection.
"We are keeping this position under review but if the current offers are accepted then this will result in additional costs of around £14 million in the current financial year.
"When you apply this additional cost against our budget assumptions and the additional funding that we expect to receive from the Scottish Government we will have to find approximately £1.6 million to fund the pay award in 2022/23.
"These additional figures are not included in today's revenue monitoring report. The recurring implication of this will also impact on future years."
PKC's current financial position will be kept under review with the council reporting "mitigating action may be required to support the delivery of the 2022/23 Final Revenue Budget".
