Microsoft’s commercial Microsoft 365 and Office 365 price changes took effect on July 1, 2026. If you already subscribe, an affected plan generally moves to the new price at its next renewal after that date; the size of the increase depends on your exact SKU, country, contract, sales channel, and any negotiated discount. The most useful ways to limit the bill are to remove unneeded seats, match each person’s license to their work, and compare a no-Teams edition only if your organization does not need Teams.
When the Microsoft 365 price change applies
Microsoft’s commercial pricing FAQ, dated March 24, 2026, says the new prices took effect July 1, 2026. Existing subscribers on affected products move to the new price at their next renewal after that date. Customers on multi-year agreements keep current pricing until renewal, and the change applies to impacted monthly and annual billing plans. See Microsoft’s pricing and packaging FAQ for the timing and product-specific terms.
The earlier opportunity Microsoft described to renew or upgrade before July 1 to keep then-current pricing was limited: the old price would last only until the next renewal after July 1. That date has passed, so it is not a way to lock an old rate now. Your renewal date and agreement still determine when your own bill changes.
Do not assume the update applies—or does not apply—based on the words “Office 365” alone. Microsoft lists a broad set of commercial Business, Enterprise, Frontline, government-equivalent suites and standalone products. Check the actual subscription name and SKU in your tenant or contract.
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How much selected US list prices changed
The figures below are Microsoft’s published US commercial list prices per user per month for selected plans, with and without Teams. They are not a quote for your organization: Microsoft says prices may vary by country and currency, and contract terms, reseller pricing, and discounts may change what you pay. Microsoft’s pricing page is dated February 16, 2026; confirm the current regional price and your agreement before estimating an invoice. See Microsoft’s published plan pricing.
| Plan | Edition | Prior US list price | New US list price | Published increase |
|---|---|---|---|---|
| Microsoft 365 Business Basic | With Teams | $6/user/month | $7/user/month | 16% |
| Microsoft 365 Business Standard | With Teams | $12.50/user/month | $14/user/month | 12% |
| Microsoft 365 Business Standard | No Teams | $9.29/user/month | $10.79/user/month | 16% |
| Office 365 E3 | With Teams | $23/user/month | $26/user/month | 13% |
| Office 365 E3 | No Teams | $14.45/user/month | $17.45/user/month | 21% |
| Office 365 E5 | With Teams | $38/user/month | $41/user/month | 8% |
| Microsoft 365 E3 | With Teams | $36/user/month | $39/user/month | 8% |
| Microsoft 365 E3 | No Teams | $27.45/user/month | $30.45/user/month | 11% |
| Microsoft 365 E5 | With Teams | $57/user/month | $60/user/month | 5% |
| Microsoft 365 F1 | With Teams | $2.25/user/month | $3/user/month | 33% |
| Microsoft 365 F3 | With Teams | $8/user/month | $10/user/month | 25% |
For a rough list-price estimate, multiply the per-user monthly difference for the applicable plan by the number of paid seats and billing months. For example, 10 Business Standard with-Teams seats at the displayed US list prices represent a $15 monthly difference ($1.50 × 10), or $180 over 12 months if the same list price and seat count apply throughout. This is arithmetic on Microsoft’s published examples, not a forecast of a negotiated bill.
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Ways to reduce the bill without removing needed capabilities
1. Check paid seats against active users
Review assigned licenses alongside active staff and their roles. Look for unused accounts, duplicate assignments, and people who no longer need a paid seat. Before removing or reassigning a license, confirm the organization’s access, retention, and compliance requirements; a lower seat count is not worth losing required access or records.
2. Match each role to the lowest suitable plan
List what each role actually needs: desktop apps, email, identity and security controls, device management, compliance features, Teams, and storage. Then compare those requirements with the current plan and any lower tier. Microsoft’s packaging changes include added capabilities, but they vary by SKU; do not assume a feature listed for one plan is included or already available in another. Microsoft says listed additions were rolling out during 2026, with those rollouts complete by August 1, 2026. Check the current feature table and availability in your tenant before changing licenses.
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3. Compare no-Teams editions only if Teams is genuinely unnecessary
Microsoft publishes separate no-Teams commercial editions, including the examples in the table. A lower price does not automatically make one the better fit: check whether users need Teams and whether the edition includes the other capabilities they rely on. Include the cost of any replacement meeting or collaboration service, migration, support, and training when comparing total operating costs. Microsoft’s Microsoft 365 enterprise plans page provides plan information; verify the exact SKU and terms before switching.
4. Review renewal terms with your administrator or reseller
Confirm the subscription’s next renewal date, commitment term, billing channel, and applicable discount with the tenant administrator or reseller. Microsoft’s public list prices do not reveal negotiated contract terms or guarantee a right to change plans mid-term. Ask for a like-for-like renewal estimate using your region, SKU, seat count, and current terms.
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5. Build an annual comparison using your real seat mix
Compare the current configuration with any proposed one using the same quantities, billing period, and required features. Include replacement software or services and transition costs rather than counting only license savings. For a useful estimate, collect:
- Country and billing currency
- Exact product names or SKUs and the number of seats for each
- Renewal date and monthly or annual commitment
- Whether the contract is direct or through a reseller, plus any negotiated discount
- Required apps, security, management, compliance, storage, and Teams capabilities
What changes for consumers, education, nonprofits, and government
Consumer subscriptions
Microsoft says this July 2026 commercial update does not change consumer pricing. Its US Store lists Microsoft 365 Personal at $99.99 per year or $9.99 per month and says annual payment costs less than monthly payment; these are consumer-store prices, not business-tenant licenses. See Microsoft 365 Personal in the US Store.
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Education
Microsoft says education pricing is not affected by this specific update. Institutions should check their education agreement rather than apply commercial list-price examples to their subscriptions.
Nonprofits
Microsoft says nonprofit pricing adjusts in line with commercial pricing and describes a 60–75% discount rate for impacted products. Its US nonprofit page lists Business Standard staff pricing at $3.50 per user per month and Business Premium at $5.50 per user per month, paid yearly; eligibility and offer terms apply and can change. Check current eligibility and pricing directly with Microsoft or its partner. See Microsoft’s nonprofit Microsoft 365 plans and nonprofit FAQ.
Government customers
Government cloud products have separate details, exclusions, and differences in Microsoft’s FAQ. Buyers should verify the exact environment and agreement rather than reuse commercial price assumptions.
Keep the 2025 Teams change separate
Microsoft also published separate Teams packaging and pricing changes effective November 1, 2025. That earlier change is distinct from the July 1, 2026 suite price update; whether both matter to a customer depends on the SKU and renewal. See Microsoft’s Teams licensing and pricing FAQ for that separate change.
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