Tas pollies have refused a 10pc pay rise

Tasmania's lower house has rejected a proposed 10.5 per cent pay rise for politicians.

Premier Will Hodgman on Tuesday said it was the right decision and MP's pay should shift in line with the Wage Price Index, so politicians aren't approving their own fatter pay packet.

"We firmly believe this level of increase is inconsistent with community expectations, particularly in the context of a tightening budget situation from decreasing GST revenues," the premier said in a statement, urging the upper house to make a similar finding.

State MPs earn $120,835 a year.