Microsoft is raising the price of Microsoft 365 across most Business, Enterprise and Non-Profit subscription plans worldwide, a move that affects most business users in 2026. According to Microsoft, the increases reflect the substantial number of new features (especially AI-powered tools and enhanced security) added to Microsoft 365 in recent years.
From 1 July 2026, most commercial Microsoft 365 Business and Enterprise suites will cost $12–$36 more per user, yearly at list price, with frontline plans hit hardest in percentage terms. In exchange, Microsoft is bundling in more AI, security and device-management features – whether you asked for them or not.
You can’t avoid the price rise, but you can:
- Lock in current pricing where your contracts allow,
- Trim unused or over-licensed seats, and
- Decide, deliberately, how much of Microsoft’s “AI everywhere” vision you’re actually prepared to pay for.
The update applies to commercial and nonprofit Microsoft 365 suites, with government suites also changing in parallel.
New list prices for Microsoft 365 Business plans
The new prices aren’t an ‘across the board’ increase. Instead, it’s targeted to raise the cost of cheaper plans, narrowing the price gap with more expensive plans.
This is clearest with the Business plan changes. The Basic plan goes up by 16.7% compared to the Premium plan that remains at the same price.
The biggest percentage jumps hit the frontline SKUs (F1, F3), which are often deployed in large numbers for retail, hospitality and field staff.
Office 365 E3 (still widely used) moves by 13%, and Microsoft 365 E3/E5 both go up too. The changes might seem small in percentage terms, but significant at the scale those plans are sold at.
Office 365 E1 is unchanged at $10, at least in list terms.
Here’s how Microsoft announced the price rises, as an image only.
These price rises are in addition to the new Copilot Business add-on
The real annual prices
Microsoft always quotes license prices as monthly figures, even though customers have to pay yearly in advance. These are the hchanges from 1 July 2026 based on Microsoft’s figures (above) but converted to realistic, annual amounts.
| Microsoft 365 plans | Current list prices | List prices from July 1, 2026 | % increase |
| Business Basic | $72 | $84 | 16.7% |
| Business Standard | $150 | $168 | 12.0% |
| Business Premium | $264 | $264 | 0.0% |
| Office 365 El | $120 | $120 | 0.0% |
| Office 365 E3 | $276 | $312 | 13.0% |
| Microsoft 365 E3 | $432 | $468 | 8.3% |
| Microsoft 365 E5 | $684 | $720 | 5.3% |
| Microsoft 365 Fl | $27 | $36 | 33.3% |
| Microsoft 365 F3 | $96 | $120 | 25.0% |
All prices in US dollar commercial list prices, per user annually, with Teams and before tax.
Suites sold without Teams will also increase by an equivalent dollar amount, even though the starting price is different.
A lot of volume customers don’t actually pay list – discounts, legacy contracts and promotions all complicate things.
New vs existing customers
New customers buying impacted suites on or after 1 July 2026 will see the new list price immediately.
Existing customers on commercial Microsoft 365 subscriptions see the new price at their next renewal after 1 July 2026, regardless of how they buy (CSP, Enterprise Agreement, etc.).
Organizations could can lock in current pricing if renewal is before 1 July 2026 and are able to sign a new multi-year term.
Channel and customer type
The price update applies across all purchasing channels: CSP, Enterprise Agreements, direct web, and so on.
Nonprofit pricing will move up in line with commercial pricing (discount percentage stays the same).
Government plans (including US government and defense tenants) are also changing, with specific details in a separate government blog.
What Microsoft says you’re getting for the extra money
Microsoft is tying this rise very directly to three sets of added capabilities in 2026:
More Copilot / AI in the base suites
Copilot Chat in Word, Excel, PowerPoint, Outlook and OneNote.
Agent Mode and new agents that can automate more of your day-to-day workflows.
Extra security in E3-level suites and below
Defender for Office Plan 1 email protections being folded into Office 365 E3 and Microsoft 365 E3, for better phishing and malware detection.
URL checks in Office 365 E1, Business Basic and Business Standard, to block known malicious links when users click in email and Office apps.
More Intune / endpoint management
Intune Remote Help, Advanced Analytics and Plan 2 capabilities added to Microsoft 365 E3/E5.
E5 plan: Endpoint Privilege Management, Enterprise App Management and Microsoft Cloud PKI, plus Security Copilot rolled into the subscription.
Microsoft’s pitch is that if you were already paying separately for these security and management add-ons, the new bundles might actually be better value. If you weren’t, then you’re effectively paying more for things you may or may not use.
What you should do before July 2026
Here’s a practical checklist to attach to this price rise:
Map your renewals against 1 July 2026
Work out which agreements renew after that date – those are directly exposed to the new list prices.
If you have renewals in early/mid-2026, ask your Microsoft rep or partner what options you have to renew early at current rates.
Audit your license mix
Identify who genuinely needs E3/E5 features vs those who could drop to Business or E1/E3 (Office 365).
Frontline plans (F1/F3) are seeing some of the largest percentage jumps – look carefully at how many of those seats you really need.
Factor in Copilot and bundled security
For Business Premium and Microsoft 365 E5 in particular, the added security features may let you retire some third-party tools.
If you were planning a Copilot rollout or investing in more Intune/Defender add-ons, check whether the new bundles actually reduce your separate spend.
Talk to your partner early
Microsoft sales partners are being explicitly told to use this change to drive early renewals and upsells , use that to your advantage and negotiate.
Microsoft Launches Cheaper Microsoft 365 Copilot Business, AI Add-On for Small Organizations
