The salary increases, together with building and motor insurance, should be paid by the national fiscus, said Salga CEO Xolile George.
Councillors needed insurance as their properties were often damaged during protests, he told the newspaper.
"We must appreciate the fact that working at local government level as a public representative attracts a considerable amount of risk."
Salga has lobbied for salary increases over the past two years.
It wanted remuneration at a local government level to be equitable with provincial and national government salaries, George told the newspaper.
Municipal councillors currently earned R380 000 a year, which would increase to R401 000 in terms of a recommended salary hike.
Ministers' salaries would be increased from R1.9m to above R2m a year, according to the newspaper.