Commercial Microsoft 365 customers may face higher costs at renewal after Microsoft’s July 1, 2026 price-and-packaging update. The change is targeted: it affects selected commercial plans and components, while consumer, education, standalone Teams, and standalone Copilot pricing are excluded.
Microsoft’s July 2026 change is a commercial Microsoft 365 price-and-packaging update, not a universal Microsoft price increase. If your organization buys an affected commercial Microsoft 365, Office 365, Windows, EMS, Entra, or Microsoft 365 Apps subscription, the new price applies to new purchases and renewals from July 1, 2026. Existing customers generally keep their current contracted pricing until their next renewal.
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Personal Microsoft 365 subscriptions, education pricing, standalone Microsoft Teams, and standalone Microsoft 365 Copilot SKUs are not being repriced by this particular update. That distinction matters: a headline about “Microsoft 365 prices” can otherwise make a household subscriber or student think their plan has changed when it has not.
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What changed—and when
Microsoft announced the global commercial update on December 4, 2025. The commercial price change took effect on July 1, 2026, with local-market adjustments by country and currency. Microsoft says the updated packages reflect its investments in security, compliance, productivity, AI, and IT management; whether the additions are worth the added cost depends on what your organization will actually deploy and use.
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The practical timing is straightforward:
- New commercial customers: New pricing applies from July 1, 2026.
- Existing customers renewing after July 1, 2026: The new price generally begins at that renewal.
- Existing multi-year agreements: Current pricing generally continues through the present term, then changes at renewal.
Advice issued before July 1 about renewing early at the old price was time-limited. It is not a current option to assume available after the effective date.
Which commercial plans increased in the United States
The table below is Microsoft’s commercial US-dollar list pricing for subscriptions that include Teams. It is useful for estimating the direction and scale of a change, but it is not your invoice. A CSP quote, Enterprise Agreement, government contract, promotion, nonprofit price, foreign currency price list, or negotiated discount can produce a different result.
| SKU with Teams | Earlier monthly list price per user | New monthly list price per user | Change |
|---|---|---|---|
| Office 365 E1 | $10.00 | $10.00 | No change |
| Office 365 E3 | $23.00 | $26.00 | 13% |
| Office 365 E5 | $38.00 | $41.00 | 8% |
| Microsoft 365 E3 | $36.00 | $39.00 | 8% |
| Microsoft 365 E5 | $57.00 | $60.00 | 5% |
| Microsoft 365 F1 | $2.25 | $3.00 | 33% |
| Microsoft 365 F3 | $8.00 | $10.00 | 25% |
| Microsoft 365 Business Basic | $6.00 | $7.00 | 16% |
| Microsoft 365 Business Standard | $12.50 | $14.00 | 12% |
| Microsoft 365 Business Premium | $22.00 | $22.00 | No change |
The “with Teams” label is essential. Microsoft also has no-Teams commercial offers, and their increases are not necessarily the same percentages. For example, US list pricing moved from $14.45 to $17.45 for Office 365 E3 without Teams, from $27.45 to $30.45 for Microsoft 365 E3 without Teams, from $4.40 to $5.40 for Business Basic without Teams, and from $9.29 to $10.79 for Business Standard without Teams. Business Premium without Teams remains listed at $18.79.
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What the change could cost your organization
For budgeting, calculate the increase using your renewal quote, not a currency conversion of the US table. Still, the list-price math shows why seat counts and renewal dates deserve attention.
For example, an organization with 50 Microsoft 365 E3 users on the US with-Teams list price would see a $3 monthly increase per user: 50 × $3 × 12 = $1,800 more per year before taxes, discounts, currency effects, and any billing-term differences. A 100-seat Business Standard deployment would rise by $1.50 per user per month, or $1,800 annually on that same list-price basis.
That calculation does not establish what you owe. It is a planning estimate only. Your renewal may include different SKUs, add-ons, prorated changes, regional pricing, partner margins, agreement discounts, or a different billing commitment.
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What is included in the updated packages
Price and product changes are linked, but not every added capability matters equally to every buyer. Microsoft says eligible customers receive qualifying additions automatically as they roll out, regardless of the price paid or agreement term. The listed rollouts were to be completed by August 1, 2026, and Microsoft says tenants receive at least 30 days’ Message Center notice before a packaging change becomes available.
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| Plan group | Included additions described by Microsoft |
|---|---|
| Office 365 E3 | Microsoft Defender for Office 365 Plan 1. |
| Microsoft 365 E3 | Microsoft Defender for Office 365 Plan 1, Intune Remote Help, Intune Advanced Analytics, and Intune Plan 2. |
| Microsoft 365 E5 | The E3 additions, plus Microsoft Security Copilot, Intune Endpoint Privilege Management, Microsoft Cloud PKI, and Intune Enterprise Application Management. |
| Business Basic and Business Standard | An additional 50 GB of email storage, URL time-of-click protection, and Copilot Chat enhancements and analytics. |
| Business Premium | An additional 50 GB of email storage plus Copilot Chat enhancements and analytics. |
The cited Copilot Chat enhancements include inbox and calendar awareness and access to Word, Excel, and PowerPoint agents. They are not the same thing as a separately purchased Microsoft 365 Copilot license, whose standalone SKU pricing is excluded from this update.
Before treating an included item as a saving, verify four things: that it is enabled in your tenant, that your staff needs it, that you are not already paying separately for a similar product, and that you have the security, privacy, licensing, and change-management controls needed to use it. An included security or AI capability has little financial value if it remains unconfigured.
Who is and is not affected
Personal and education customers
This commercial update does not change consumer or education pricing. If you pay for Microsoft 365 Personal or Family, or use an education plan, do not use this commercial table to predict your price. Microsoft has made other consumer pricing changes at other times; they are separate events.
Businesses and nonprofits
Commercial organizations should expect the update to be relevant when their affected subscription renews. Nonprofit pricing is adjusted in line with commercial pricing because the nonprofit discount is tied to commercial rates. Microsoft cites a 60% to 75% discount range for affected nonprofit products, but the exact renewal treatment should come from the organization’s account team or licensing partner.
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Government customers
GCC, GCC High, DoD, and NCOE are covered; US AGC is not. NCOE pricing includes a 10% uplift over commercial pricing. Feature availability can follow a different schedule because government offers have separate compliance frameworks and roadmaps. For government suite increases above 10%, Microsoft says federal regulations require a phase-in over multiple years. Government buyers should obtain an agreement-specific renewal analysis rather than applying the commercial table directly.
Explicit exclusions
- Standalone Microsoft Teams pricing is unchanged by this update.
- Standalone Microsoft 365 Copilot pricing is unchanged by this update.
- Microsoft 365 E7 pricing is unchanged, although E5 packaging additions also apply to E7.
- Office 365 E1 and Business Premium show no increase in the cited US commercial with-Teams table. That is not evidence that every regional, no-Teams, government, or contract version is unchanged.
A practical renewal checklist
- Build a subscription inventory. Export active licenses from the Microsoft 365 admin center and record the exact SKU name, seat count, renewal date, billing frequency, current unit price, and purchase channel for each subscription.
- Separate “with Teams” from “no Teams.” Do not compare them as if they were the same SKU. The price movement can differ.
- Get the local renewal quote. Ask your Microsoft representative or Cloud Solution Provider for the applicable local price list and the exact price at renewal. Use that figure for approval and cash-flow planning.
- Calculate the annual variance. For each line item, use (new unit price − current unit price) × seats × billed months. Keep taxes, currency effects, discounts, and add-ons separate so the budget owner can see what caused the difference.
- Review duplicative tools. Compare newly included Defender, Intune, storage, and security features with existing third-party contracts and separate Microsoft add-ons. Do not cancel a tool solely because an entitlement appears; confirm functional coverage and implementation readiness first.
- Check Message Center and tenant readiness. Confirm the announced feature is available in your tenant before changing policy or forecasting savings. Pay particular attention to Defender, Intune, and Security Copilot entitlements.
- Document the renewal decision. Record whether the organization will retain, reduce, reassign, or expand licenses—and why. Inactive accounts and over-licensed users are a recurring source of avoidable subscription spend.
Questions to ask your licensing partner or Microsoft account team
- Which exact SKUs in our tenant are in scope at our next renewal date?
- What are our contracted unit prices, discounts, taxes, and currency terms after renewal?
- Are we on with-Teams or no-Teams offers for each affected plan?
- Which packaging additions are already active in our tenant, and which are still pending?
- Do we have any separately paid products whose functionality overlaps the additions?
- How does the change apply to our nonprofit, government, CSP, Enterprise Agreement, or multi-year arrangement?
- For government tenants, what is the applicable compliance rollout and any mandated price phase-in?
The financial takeaway
The most useful response is neither to assume every Microsoft bill is rising nor to dismiss the update because one familiar plan did not change. Treat it as a renewal-planning event. Match the exact commercial SKU to the renewal date and local quote, then decide whether the newly bundled capabilities reduce other spending or improve security and administration enough to justify the cost.
Frequently Asked Questions
Did Microsoft raise the price of Microsoft 365 Personal or Family?
No. This is a commercial price-and-packaging update. It does not change consumer Microsoft 365 or education pricing.
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Generally, an existing customer moves to the new price at its next renewal after July 1, 2026. A multi-year agreement generally retains its current pricing until renewal.
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Did standalone Teams or Microsoft 365 Copilot get more expensive?
No. Microsoft lists standalone Teams and standalone Microsoft 365 Copilot SKUs as excluded from this specific update.
Can I use the US price table to calculate my exact bill?
No. The published figures are US commercial list prices and vary by SKU. Use your local Microsoft price list, account team, or qualified licensing partner’s renewal quote for budget approval.
Does a no-change Business Premium or Office 365 E1 price mean my account is unaffected?
The cited US with-Teams list-price table shows no increase for those two plans. That does not establish that all regions, agreement types, or related no-Teams offers are unchanged.
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For affected commercial subscriptions, budget from the next renewal date using your local quote—not the US list-price table. Personal, education, standalone Teams, and standalone Copilot customers are outside this specific July 2026 update.
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Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
