Families with children will be particularly badly affected, the party warns.
If both parents work together they will be an average of £2073 a year worse off. Where just one parent works that figure is £3720 a year.
The average household will lose out to the tune of £974 a year, analysis for Labour by the House of Commons Library of data from the respected Institute for Fiscal Studies (IFS) shows. The statistics take into account all tax and benefit changes affecting households between 2010 and April 2015, including the increase in the threshold before income tax starts to be paid. The drop comes on top of falling wages, which have left working people on average £1600 a year worse off since 2010, Labour says.
Ed Balls, Labour's shadow chancellor, said: "David Cameron is trying to tell working people they are better off, but he's not fooling anybody. Taking into account all the changes to tax and benefits since 2010, families will be almost £1000 a year worse off on average by the time of the next election. In other words, the Tories are giving with one hand but taking away much more with the other.
"So whatever out of touch claims David Cameron and George Osborne try to make, these independent figures are clear: hard working people are worse off under the Tories."
The figures also say a single pensioner will be £247 worse off a year and a pensioner couple £222. David Cameron admitted yesterday it would "take time" before ordinary people began to feel the economic recovery: "But we are recovery from a long, deep and difficult recession and it does take time before people really feel the effects of an economic recovery. We've seen this recovery so far come in jobs, in more people getting into work, rather than in increases in wages."
But he said after the rise in the income tax threshold this weekend: "Everyone earning under £100,000, everyone, will be, under this Government, over £700 better off because we've said you can earn £10,000 before you start paying taxes."