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This is not a universal increase for every Office customer. The update applies to selected commercial Microsoft 365, Office 365, Microsoft Apps, Windows, Entra and Enterprise Mobility + Security plans. Microsoft says the higher prices reflect added AI, security, productivity, compliance and IT-management capabilities—but the value depends on which features an organization actually uses.
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Who is affected by Microsoft’s 2026 price increase?
The change covers selected commercial subscriptions, including:
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- Office 365 and Microsoft 365 enterprise suites
- Microsoft 365 Business plans
- Frontline plans
- Microsoft 365 Apps
- Windows Enterprise-related licenses
- Entra ID plans
- Enterprise Mobility + Security plans
- Certain government and nonprofit equivalents
Standalone Teams and Copilot licenses are excluded from this particular update. Consumer Microsoft 365 plans and education pricing are also not changing under this July 1, 2026 update, according to Microsoft’s FAQ.
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Microsoft 365 E7 pricing is not changing as part of the update, although some packaging changes introduced for E5 also apply to E7. Microsoft’s U.S. table also lists no increase for Office 365 E1 and Microsoft 365 Business Premium.
When will customers actually pay more?
- December 4, 2025: Microsoft announced the changes.
- July 1, 2026: The new list prices became effective for new and renewing customers.
- Next renewal after July 1, 2026: This is when many existing subscribers will see the higher charge.
The effective date does not necessarily mean every customer’s invoice changed on July 1. A customer renewing before that date could generally retain the previous price until the next renewal. Multi-year agreements generally preserve existing pricing until renewal, although the exact result depends on the contract, reseller and licensing channel.
Monthly subscriptions may reflect the new list price sooner than annual or multi-year commitments. Businesses should check the renewal date and contractual price with Microsoft or their reseller rather than relying only on the public list price.
How much are Microsoft 365 prices increasing?
The following are Microsoft’s published U.S. commercial list prices per user, per month. They are not universal quotes. Currency, country, taxes, billing terms, promotions, reseller discounts and enterprise agreements can change the amount actually paid.
Enterprise suites with Teams
| Plan | Previous price | July 2026 price | Change |
|---|---|---|---|
| Office 365 E3 | $23 | $26 | 13% |
| Office 365 E5 | $38 | $41 | 8% |
| Microsoft 365 E3 | $36 | $39 | 8% |
| Microsoft 365 E5 | $57 | $60 | 5% |
Enterprise suites without Teams
| Plan | Previous price | July 2026 price | Change |
|---|---|---|---|
| Office 365 E3 | $14.45 | $17.45 | Approximately 21% |
| Office 365 E5 | $29.45 | $32.45 | 10% |
| Microsoft 365 E3 | $27.45 | $30.45 | 11% |
| Microsoft 365 E5 | $48.45 | $51.45 | 6% |
The raw no-Teams Office 365 E3 prices rise by $3, from $14.45 to $17.45. That is approximately a 20.8% increase, which rounds to 21%. Some Microsoft page labeling has shown a different percentage, so buyers should calculate the change from the actual prices.
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Business plans
| Plan | Previous price | July 2026 price | Change |
|---|---|---|---|
| Microsoft 365 Business Basic with Teams | $6 | $7 | 16% |
| Microsoft 365 Business Standard with Teams | $12.50 | $14 | 12% |
| Microsoft 365 Business Premium with Teams | $22 | $22 | No listed increase |
| Business Basic without Teams | $4.40 | $5.40 | 23% |
| Business Standard without Teams | $9.29 | $10.79 | 16% |
| Business Premium without Teams | $18.79 | $18.79 | No listed increase |
Other affected licenses
| License | Previous price | July 2026 price | Change |
|---|---|---|---|
| Microsoft 365 Apps | $12 | $14 | 17% |
| Apps for Business | $8.25 | $10 | 21% |
| Entra Plan 1 | $6 | $7 | 16% |
| Entra Plan 2 | $9 | $10 | 11% |
| EMS E3 | $10.60 | $12 | 13% |
| EMS E5 | $16.40 | $18 | 10% |
| Windows E3 | $6.63 | $7.63 | 15% |
| Windows E5 | $11.81 | $12.81 | 9% |
| Windows Enterprise per device | $5.85 | $7.63 | 31% |
| Microsoft 365 Apps per device | $36 | $42 | 17% |
| Microsoft 365 F1 | $2.25 | $3 | 33% |
| Microsoft 365 F3 | $8 | $10 | 25% |
Microsoft’s complete pricing and packaging details are available in its published update. Government and nonprofit pricing may use different programs or equivalents.
What customers receive for the higher price
AI and Copilot Chat features
Microsoft lists enhanced Copilot Chat capabilities, including Copilot Chat Analytics, inbox and calendar awareness, and access to Word, Excel and PowerPoint agents in eligible plans. Administrators also receive controls intended to secure, manage and measure Copilot Chat.
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Email and collaboration security
Microsoft says eligible Office 365 E3 and Microsoft 365 E3 plans receive Microsoft Defender for Office 365 Plan 1. The service is designed to help protect email and collaboration workloads from phishing, malware, malicious links and related threats.
Office 365 E1, Business Basic and Business Standard receive URL time-of-click protection. This can check links when a user clicks them rather than relying only on an earlier scan, helping identify links whose risk changes after delivery.
Microsoft 365 E5 also receives Microsoft Security Copilot for Microsoft 365. Security Copilot is intended to assist security teams with investigation and response, but it is not an autonomous replacement for security personnel or a complete security program.
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Microsoft 365 E3 and E5 receive combinations of additional Intune and security capabilities, including:
- Intune Remote Help
- Intune Advanced Analytics
- Intune Plan 2
- Intune Endpoint Privilege Management
- Intune Enterprise Application Management
- Microsoft Cloud PKI
These additions may be valuable to organizations already using Microsoft Entra, Intune, Defender and Purview. They may have less value for a business standardized on third-party endpoint management, identity, email security or certificate infrastructure.
Business-plan storage and protection
Business Basic, Business Standard and Business Premium receive an additional 50 GB of email storage per user. Business Basic and Business Standard also receive URL time-of-click protection, while eligible business plans receive the listed Copilot Chat enhancements and analytics.
Additional storage can reduce pressure to buy separate capacity, but it does not automatically create better retention policies, backup, archiving or data governance.
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How to calculate the increase for your organization
Use this formula:
Annual increase = (new monthly price − old monthly price) × number of seats × 12
For example, using the U.S. list prices:
- 100 Office 365 E3 seats: $3 × 100 × 12 = $3,600 more per year
- 100 Microsoft 365 E3 seats: $3 × 100 × 12 = $3,600 more per year
- 100 Microsoft 365 Business Basic seats: $1 × 100 × 12 = $1,200 more per year
- 100 Microsoft 365 Business Standard seats: $1.50 × 100 × 12 = $1,800 more per year
- 100 Microsoft 365 E5 seats: $3 × 100 × 12 = $3,600 more per year
These are list-price illustrations, not invoice estimates. Your total may differ because of geography, currency, taxes, promotions, reseller terms, discounts, billing frequency, commitment length and add-on licenses.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Is the higher price worth paying?
There is no universal answer. Microsoft’s explanation is a vendor justification, not independent proof that every customer will receive equivalent financial value.
The increase is easier to justify when an organization will actively deploy the included security and management tools. For example, a company may gain value if it can replace separate email-security, endpoint-management, identity or certificate services with Microsoft capabilities that it can configure and monitor effectively.
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1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minuteThe increase is harder to justify when users mainly need Word, Excel, PowerPoint and email, while the organization already pays for equivalent third-party tools. Bundled features still carry potential implementation costs: configuration, migration, policy design, training, monitoring and incident response.
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Questions to answer before renewing
- Are Defender, Intune, Entra, Purview or Security Copilot already in use?
- Does the organization have the staff and processes to deploy and monitor the added features?
- Will users actually use Copilot Chat or the Word, Excel and PowerPoint agents?
- Are third-party security and endpoint products duplicating the bundle?
- Does every user need the same license tier?
- Would Business Premium, Microsoft 365 E3 or a lower tier meet the requirements for particular roles?
- Is a no-Teams license operationally practical?
- Do only some employees need a separate full Microsoft 365 Copilot license?
Should you choose a no-Teams plan?
No-Teams plans have lower absolute prices in many rows, but they are not automatically the cheapest overall choice. Removing Teams can create costs involving collaboration, employee training, governance, integrations and migration.
Compare the entire collaboration stack. If Teams is already embedded in meetings, chat, telephony, file sharing or workflows, the apparent license saving may not compensate for the operational disruption. If Teams is genuinely unnecessary, a no-Teams SKU may deserve consideration—but confirm that the plan includes the applications, storage, security and identity entitlements the organization needs.
Practical renewal checklist
- Export the tenant’s current license inventory.
- Separate commercial, nonprofit, government, education and consumer subscriptions.
- Record each SKU, seat count, billing frequency, commitment term, renewal date, reseller and effective price.
- Map every license to Microsoft’s July 1, 2026 price table.
- Calculate the annualized increase.
- Identify newly bundled features that are already licensed elsewhere.
- Check whether a no-Teams plan is permitted and practical.
- Segment licenses by job function instead of giving every employee the highest tier.
- Ask Microsoft or the reseller for the contractual renewal price, not only the public list price.
- Confirm whether changing plans resets a commitment, changes payment terms or affects service and data entitlements.
Alternatives to consider
Switching is not automatically cheaper, but the price change may justify a structured comparison:
- Google Workspace may suit organizations centered on Gmail, Docs, Sheets, Meet and Google’s collaboration model. Assess Microsoft file compatibility, identity integration, security tools and migration effort.
- Zoho Workplace may appeal to smaller organizations seeking an integrated office and collaboration suite. Compare application compatibility, administration and ecosystem depth.
- LibreOffice can fit organizations that mainly need locally installed document, spreadsheet and presentation software. It is not a like-for-like replacement for Microsoft 365 cloud services, Teams, Entra, Intune or Microsoft’s bundled security stack.
For many businesses, the most economical response will not be a wholesale migration. It may be a combination of staying with Microsoft, segmenting users, dropping unnecessary add-ons, moving selected users to a lower tier or adopting no-Teams licensing where appropriate.
Bottom line
Microsoft’s selected commercial Microsoft 365 price increases are already effective as of July 1, 2026, but many existing customers will not see them until their next renewal. The largest question is not simply whether the subscription costs more; it is whether the organization will use the newly bundled AI, security and management capabilities—or continue paying separately for overlapping tools.
Audit the tenant, calculate the renewal impact, verify the contractual price and compare each plan with actual user requirements before accepting an upgrade or switching platforms.
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