Boris Johnson aims to change National Insurance rules so workers will not have to pay it until they earn £ 12, 500.
Earlier in Teesside, the PM promised his party would put up the threshold to ensure “low tax for working people”.
But he later confirmed to the BBC it would be raised to £ 9, 500 in the first budget of a Tory government, with no timetable for the additional £ 3, 000.
Labor’s John McDonnell said people relying on local services would be “paying the price”.
The current threshold sees workers paying National Insurance contributions once they earn £ 8, 628 a year.
Mr Johnson had promised to raise the threshold to £ 12, 500 during the Tory leadership contest.
The Institute for Fiscal Studies estimated that the rise of £ 12, 500 – which would match the threshold where workers start paying income tax – would cost £ 11 bn, but could see workers saving up to £ 465 a year.
On a visit to an engineering plant, Mr Johnson was asked by one of the workers whether his pledges for low tax were “for people like you … or people like us “.
The PM said:” I mean low tax for people … working people.
“We are going to be cutting national insurance up to £ 12, 000 [and] we are going to be making sure that we cut business rates for small businesses. We are cutting tax for working people. “
He later corrected the figures in an interview with the BBC, and said he hoped the move would help drive consumption and stimulate the ****
However, Mr McDonnell said it would cost the tax payer £ (bn.
“Even after 10 years of cruel cuts and despite creaking public services, the Tories still think the answer to the challenges of our time is a tax cut of £ 1. 64 a week, with those on Universal Credit getting about 60 p, “he said.
” Meanwhile independent experts have said this will cost up to £ 11 bn, so everyone who relies on public services and social security will be wondering whether they will be paying the price. “
What is National Insurance?
National Insurance is a tax paid by workers and the self-employed who are over 16, with the amount varying depending on how much you earn.
Employers do make some contributions on behalf of their workers, but it again depends on how much they are paid.
For employees, it is taken straight out of your salary before you receive it, while self-employed people need to pay as part of their self-assessment.
By paying the tax, you are entitled to a number of benefits, such as a state pension, Jobseeker’s Allowance and maternity pay.
The contributions cover these benefits, with some also going towards the NHS.
Where do the other parties stand on National Insurance?
The Liberal Democrats announced in their manifesto earlier that they plan to review the tax and National Insurance status of employees, dependent contractors and freelancers “to ensure fair and comparable treatment” and to “modernize rights to make them fit for the age of the gig economy “.
The Green Party also pledged in their manifesto – launched earlier this week – that they wanted to merge employees’ National Insurance, capital gains tax, inheritance tax, dividend tax and income tax into a single consolidated income tax, claiming it would “close loopholes” and bring in an additional £ 20 bn to the public purse.
Labor has yet to publish its manifesto, but in an announcement about its plans for the “Living Wage” earlier this month, the party pledged not to raise income tax or National Insurance contributions for the bottom 95% of earners.
The SNP says on its website it would oppose any increases in National Insurance.