As Microsoft continues to raise prices on its Microsoft 365 Business plans, with major bumps tied to AI, security, and management features. Many small and medium businesses are asking: Are these subscriptions truly overpriced for what you get? Let’s look at the price history of the Microsoft 365 Business plans and how they compare with inflation.
Here’s how Microsoft 365 Business pricing has risen over time, focusing on the three main SMB (small medium business) plans – Business Basic, Business Standard and Business Premium and then compared with the general rate of inflation.
How much have the Business plans really gone up?
Standard and Premium Business plans are now cheaper in real terms than they were just five years ago. The Microsoft 365 Business Basic plan will outpace inflation by a big margin when the 2026 price rise kicks in (40% increase vs 25% CPI).
The US Consumer Price Index (CPI) has risen by about 25% between 2020 and the most recent statistic. Compare that with the Microsoft 365 Business plan rises into 2026 between 10% and 40%.
- The cheapest plan (Basic) will have the largest cumulative rise (40%),
- Standard will get its first bump in 2026 (12%)
- Premium has only moved once so far (10%).
Notes: We’re comparing the 2026 prices against the current late 2025 inflation rate (our time-machine is out for repairs). The Microsoft 365 prices will compare a little more favorably once the mid-2026 inflation statistic is known.
The U.S. CPI-U (All items, U.S. city average, not seasonally adjusted; 1982–84=100) annual average index values for 2020–2024, plus 2025 year-to-date.
Using the upcoming 2026 US dollar list prices with Teams, per user per year on an annual commitment. Microsoft prefers to quote monthly prices even though most volume licenses are charged yearly in advance, so we use the more realistic annual rates. Copilot add-ons excluded.
As with all price vs inflation rate comparisons, it doesn’t take in account improvements in the product over the years. The Microsoft 365 apps have more and (mostly) better features since 2020, especially in Excel with, for example, dynamic arrays and Python access.
Timeline of Microsoft 365 Business prices.
Before March 2022 – the “original” Microsoft 365 Business prices
These plans started life in 2014 as the Office 365 Business family:
- Office 365 Business Essentials at $60 per user per year
- Office 365 Business Premium at $150 per user per year
In April 2020 Microsoft rebranded, keeping prices the same but changing the names:
- Office 365 Business Essentials now Microsoft 365 Business Basic
- $60 per user per year
- Office 365 Business Premium now Microsoft 365 Business Standard
- $150 per user per year
- Microsoft 365 Business now Microsoft 365 Business Premium
- $240 per user per year
March 1, 2022 – first big commercial increase
The first broad commercial Microsoft 365 price hike happened on 1 March 2022. For the Business plans the official annual change (12× the monthly) was:
From 2022 up to the newly announced 2026 rise, the “classic” Business annual prices settled at:
- Business Basic: $72 per user per year (+20%)
- Business Standard: $150 per user per year (no change)
- Business Premium: $264 per user per year(+10%)
July 1, 2026 – AI-driven increases
Microsoft has announced another global price update effective 1 July 2026, tying it to added AI, security and management features in Microsoft 365.
Translated into annual rates, the Business plan changes are:
- Business Basic: from $72 to $84 per user per year (+16.7%)
- Business Standard: from $150 to $168 per user per year (+12%)
- Business Premium: $264 per user per year (no change)
The new prices apply first to new purchases from 1 July 2026; existing customers see the increase at their next renewal after that date.
