The Microsoft 365 price increase 2026: what changed, and what to do about it

Microsoft raised list prices on most Microsoft 365 plans on July 1, 2026. If you buy annually, the bill has probably already landed, or it will at your next renewal. This is a walk through the Microsoft 365 price increase 2026 brought, what Microsoft added to the Business plans alongside it, and the license cleanup that is worth doing before you sign for another year.

Everything below comes from Microsoft’s own pricing and packaging page. These are published list prices in US dollars, per user per month. What you actually pay through a CSP partner or a reseller agreement can differ, so check your invoice rather than assuming.

What the Microsoft 365 price increase 2026 did to the Business plans

Plan	Was	Now
Business Basic	$6.00	$7.00
Business Standard	$12.50	$14.00
Business Premium	$22.00	$22.00

Business Premium did not move. Basic went up a dollar, Standard went up $1.50.

There is a second set of prices most owners have never seen. Microsoft sells “without Teams” versions of these plans, originally created for the European market and now available more broadly:

Plan (without Teams)	Was	Now
Business Basic	$4.40	$5.40
Business Standard	$9.29	$10.79
Business Premium	$18.79	$18.79

If you truly do not use Teams, that is real money. Most of the businesses we work with do use Teams, in which case this row is a curiosity and not a plan.

On the enterprise side the increases were larger. Office 365 E3 went from $23.00 to $26.00, a 13% jump. Microsoft 365 E3 went $36.00 to $39.00. The frontline plans took the worst of it: Microsoft 365 F1 went from $2.25 to $3.00, which is a 33% increase on a plan that shops with a lot of shift workers buy in volume.

Standalone Microsoft 365 Apps for business went from $8.25 to $10.00. If you have a handful of users on Apps-only because they do not need email, that line is up 21%.

What a 40-person company actually feels

Say you have 40 users, 25 on Business Standard and 15 on Business Basic.

Before: $312.50 plus $90.00, so $402.50 a month. After: $350.00 plus $105.00, so $455.00 a month.

That is $52.50 more a month, $630 a year. Annoying, not a crisis. The number gets worse the more E3 seats you carry.

What Microsoft added

Microsoft attached a packaging update to the price change. The rollout started in June 2026 and Microsoft says it completed by August 1, 2026. Tenants got at least 30 days of notice in the admin center Message Center before the change landed.

For the Business plans:

• All three got 50 GB of additional mailbox storage, plus Copilot Chat enhancements and Copilot Chat analytics.
• Basic and Standard additionally got URL time-of-click protection.

That last one is worth understanding correctly, because it is easy to over-read.

URL time-of-click protection is one capability out of Microsoft Defender for Office 365. In Microsoft’s words, the Safe Links feature “provides URL scanning and rewriting of inbound email messages in mail flow, and time-of-click verification of URLs and links in email messages.” The point is that a link which was harmless when the mail was delivered gets checked again at the moment somebody clicks it, which is how a lot of modern phishing works: send a clean link, arm the page an hour later.

What Basic and Standard did not get is Defender for Office 365 Plan 1. Per Microsoft’s Defender for Office 365 service description, Plan 1 is included in Microsoft 365 Business Premium, and as of July 1, 2026 in Office 365 E3 and Microsoft 365 E3. Business Basic and Business Standard are not on that list. Safe Attachments, anti-phishing impersonation protection, real-time detections: still not yours on Standard.

So: a useful addition, not a reason to cancel anything. If a vendor tells you the packaging update replaced your email security stack, that is a sales pitch.

The Premium math changed, quietly

Here is the part nobody announced. Standard went up and Premium did not, so the gap between them narrowed from $9.50 a user to $8.00 a user.

Eight dollars per user per month is what separates Business Standard from Business Premium at list. For that you get Defender for Office 365 Plan 1 and Intune device management, among other things. For a 40-person shop that is $3,840 a year to move everybody up.

Whether that is a good trade depends on what you are already buying. If you are paying a third party for email security filtering and a separate MDM, price those out against Premium honestly, including what it costs your team to run two more consoles. If you are paying for neither and have been meaning to fix that, Premium is now the cheaper path to both than it was in June. If your users are mostly on shared devices and you have no device management ambitions, stay on Standard and spend the money elsewhere.

We walk clients through this as part of vCIO planning, and the answer comes out different at almost every company. Do not let anyone give you a one-line verdict on it.

The license audit worth doing at renewal

A price increase is the right moment to find out what you are actually paying for. Four things, in the order they usually pay off:

1. Kill the zombie accounts. Every company we onboard has licensed users who left. Sometimes years ago. In the Microsoft 365 admin center, sort your users by last sign-in and look at anything past 90 days.

2. Convert departed employees to shared mailboxes. You usually need a former employee’s mail to stay reachable. You do not need to pay for a license to do it. A shared mailbox holds up to 50 GB without any license assigned, per Microsoft’s shared mailbox documentation. Over 50 GB, or if you need litigation hold or a large archive, you need an Exchange Online Plan 2 license on it. Under that, converting the mailbox is free. Fifteen stale accounts on Standard is $2,520 a year. See shared mailbox vs distribution list vs Microsoft 365 group for which one you actually want.

3. Right-size Basic against Standard. Basic gives web and mobile Office apps. Standard adds the desktop apps. Warehouse staff, drivers, and part-time front desk people frequently sit on Standard because someone bought in bulk. That is $7 a month each you are lighting on fire.

4. Check what landed in your tenant. Message Center tells you when the packaging update applied. If you are on Basic or Standard and you were told you now have time-of-click protection, confirm it before you change anything else about your email security posture. You can also run our free email security check to see how your domain looks from the outside, which is a different question and worth answering too.

When to bring somebody in

If you have under about 15 users and one plan across the board, the audit above is an afternoon of your own time. Do it yourself.

Bring somebody in when you have mixed plans across departments, when you are carrying E3 or E5 seats and cannot articulate why, when you are mid-way through a Microsoft 365 migration and the licensing was inherited from whoever set it up, or when a compliance requirement is driving the plan choice and you need the mapping documented. Those are the situations where the wrong SKU costs five figures a year and nobody notices for three renewals.

If you want a second set of eyes on your Microsoft 365 licensing before your renewal date, get in touch and we will go through the tenant with you.

Prices and packaging details in this article are Microsoft’s published US list prices and were verified against Microsoft’s own licensing and service description pages in August 2026. Check your own invoice and Message Center for what applies to your tenant.