Microsoft 365 business prices jumped on July 1, 2026, and if you manage a company or government subscription your next renewal will cost more. The increase hits Business, Enterprise, Frontline, and Government plans, with rises ranging from 0% to a steep 43%. Home users on Personal, Family, Premium, and Education plans are not affected. Here is exactly what changed, how much more each plan now costs per user per month, and the practical steps you can take before your renewal date to avoid overpaying.
Microsoft 365 business subscribers are now paying more. The increase took effect on July 1, 2026, hitting Business, Enterprise, Frontline, and Government plans. Some plans went up by as much as 43%.
This isn’t a surprise price rise, though some media outlets are pretending that the changes are ‘new’. Microsoft announced the price increases over six months ago, as Office Watch reported at the time.
Did we say “price rise”? That’s not right. According to Microsoft it’s a “packaging and pricing update” as if that will fool anyone.
The good news, and it is real news: Microsoft 365 Personal, Family, Premium and Education pricing did not change. If you pay for Office at home or run a school subscription, you are not affected. This is strictly a business and government hit.
What does this mean for me?
If you manage a Microsoft 365 subscription for your company, your next renewal will cost more unless you already locked in a renewal before July 1. Here is the practical part:
- If you renewed before July 1, you keep your old price until your next renewal date, and you still get all the new features Microsoft is bundling in. That is the one genuinely fair part of this rollout.
- If your renewal is coming up, budget for the increase now and check exactly which plan each user is on. The jumps are wildly uneven, from 0% to 43%, so a quick license audit could save you real money.
- If you are on Business Premium ($22) or Office 365 E1 ($10), breathe easy. Those two plans are staying flat.
Microsoft says the changes started rolling out in June 2026 and should be complete by August 1, with a 30 day notice landing in your Message Center. Watch for it.
How much more you will pay
The increases are all over the map. Here are the numbers, per user per month, which is how Microsoft likes to sell their plans.
Business plans
- Business Basic: $6 to $7 (up 16%)
- Business Standard: $12.50 to $14 (up 12%)
- Business Premium: staying at $22 (no change)
Enterprise plans
- Office 365 E3: $23 to $26 (up 13%)
- Office 365 E5: $38 to $41 (up 8%)
- Microsoft 365 E3: $36 to $39 (up 8%)
- Microsoft 365 E5: $57 to $60 (up 5%)
- Office 365 E1: staying at $10 (no change)
Frontline plans (the worst hit)
- F1: $2.25 to $3 (up 33%)
- F3: $8 to $10 (up 25%)
The frontline numbers deserve a callout. These are the plans for shift and deskless workers, often the lowest paid people in an organization, and they got the steepest percentage increases. It gets uglier if you strip Teams out: the F1 plan without Teams rises 43%, and Business Basic without Teams climbs 23%. Removing a component and paying more for the privilege is a strange kind of math.
The real price increases
Microsoft’s monthly price quotes are quite misleading because most plans are charged per year.
Office Watch has already done a realistic comparison of the Microsoft 365 annual prices.
The add-ons went up too
This is not just about the main suites. Several standalone licenses climbed by double digits:
- Windows Enterprise per device: $5.85 to $7.63 (up 31%)
- Microsoft 365 Apps per device: $36 to $42 (up 17%)
- Entra Plan 1 and EMS E3: both up by double digit percentages
The Windows Enterprise jump stings because it lands on top of RAM prices already climbing for anyone budgeting new PCs this year. If your 2026 hardware refresh already looked expensive, this makes it worse.
Nonprofits and government are not spared
Nonprofits already get a fixed 60 to 75% discount off commercial rates, so their bills move in lockstep with everyone else’s. The discount stays, but the underlying price went up, so nonprofits pay more too.
Government customers on GCC, GCC High, and DoD clouds see the same percentage increases as their commercial equivalents.
What Microsoft says you get for the money
To soften the blow, Microsoft is folding features that used to cost extra into the higher priced tiers. Whether that justifies the increase is your call, but here is what is actually included:
- Business Basic and Standard users get an extra 50GB of mailbox storage.
- Every affected plan picks up the Copilot Chat enhancements Microsoft shipped earlier this year, including inbox and calendar awareness and access to Word, Excel, and PowerPoint agents.
- Office 365 E1, Business Basic, and Business Standard get Safe Links, which scans a link at the exact moment someone clicks it rather than only when the email arrives. This is a genuinely useful security upgrade.
- Office 365 E3 and Microsoft 365 E3 now include Microsoft Defender for Office 365 Plan 1, which was previously a paid add-on.
- Microsoft 365 E3 and E5 get Intune Remote Help, Intune Advanced Analytics, and Intune Plan 2 built in.
- E5 additionally gets Intune Endpoint Privilege Management, Microsoft Cloud PKI, and Enterprise Application Management.
- E5 also gets Microsoft Security Copilot, which Microsoft sold separately until now, at 400 Security Compute Units per month for every 1,000 licenses, capped at 10,000 units.
The Copilot question
Look closely at Microsoft’s own comparison tables and you will spot the phrase “with Copilot” attached to the new higher prices. That is the real story here. Strip away the security bundling, and a large part of this increase is Microsoft spreading the enormous cost of its AI buildout across its entire business customer base, whether or not those customers asked for AI or use it.
That is worth being blunt about. Many of these features are security and management tools most companies genuinely need, and folding Defender and Safe Links into cheaper tiers is a legitimate value add. But the pattern is unmistakable: the price of everyday Office went up, and a chunk of that money is funding Copilot for a customer base that has consistently shown little interest.
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