Long held to be a form of Banksia integrifolia, Banksia saxicola was formally described by Alex George in his 1981 monograph of the genus Banksia. The species name is derived from the Latin words saxum rock and verb cŏlo inhabit or grow in. The type specimen was collected from the summit of Mount William in the Grampians on 17 February 1977. George concluded it was most closely related to Banksia canei.