Microsoft 365 Price Increase 2026: Act Before July 1
Business Basic goes from $6 to $7 per user per month. Business Standard goes from $12.50 to $14. Both changes land on July 1, 2026. For a 50-person team on Business Standard, that is $900 more per year. The price increase is not a surprise anymore. What is still catching businesses off guard is not having a plan before the deadline hits.
What's Actually Changing on July 1
Microsoft announced the pricing updates in December 2025. Most businesses have done nothing with that information yet.
Here is the short version for Business plans:
- Business Basic: $6 per user/month → $7 (+16%)
- Business Standard: $12.50 per user/month → $14 (+12%)
- Business Premium: $22 per user/month. No change.
Enterprise plans are moving too. Office 365 E3 goes from $23 to $26 (+13%). Microsoft 365 E3 goes from $36 to $39 (+8%). E5 tiers see smaller increases, in the 5 to 8 percent range.
Two plans are holding flat: Business Premium and Office 365 E1. That is worth noting. Microsoft is closing the price gap between Business Standard and Business Premium, which is probably intentional. At $22, Business Premium is starting to look more reasonable against the new Standard price of $14, especially for teams that actually need the advanced security features that come with it.
What Microsoft Is Adding in Return
Alongside the price increase, Microsoft is rolling out additional features by August 1, 2026.
Business Basic and Standard customers get an extra 50GB of email storage, URL time-of-click protection, and Copilot Chat enhancements. URL time-of-click protection is the one worth understanding. It checks links before a user clicks through rather than at send time, which closes a real gap in phishing defense for teams running without a dedicated security layer.
Business Premium and E3 customers get Microsoft Defender for Office 365 Plan 1 added, along with Intune Remote Help and Advanced Analytics.
Some of these features are genuinely useful. But features shipping in August do not change the math on a June renewal decision.
How Much More Will You Actually Pay
The per-user math looks manageable. The annual math adds up.
A 40-person team on Business Standard is looking at $672 more per year. A 75-person team pays $1,350 more. At 100 seats, you are at $1,800 per year in additional spend, before any license waste is factored in.
That last part matters. Most businesses are not paying for exactly the seats they use.
Here is a pattern that shows up often: an 80-seat Business Standard deployment where only 65 people actually use it. That overage runs about $1,050 per month at current rates. With the July increase applied, it lands closer to $1,190 per month. A license audit in that scenario saves significantly more than the price increase costs.
Professional license audits on M365 deployments routinely find 10 to 20 percent in savings. On a 75-person deployment at Business Standard rates, that range covers the entire annual increase and then some.
The Early Renewal Option
Existing customers stay at current pricing until their renewal date. If your annual subscription renews in September, you keep paying current rates until then. When September arrives, you move to the new pricing.
Many Microsoft resellers and partners allow renewing early at current rates, effectively locking in current pricing for another full annual term before July 1. For a 50-person Business Standard team, that is worth around $900 in deferred costs.
The catch: you need to know your renewal date. Most businesses on auto-pay have not looked at this in months. If you have a managed IT partner, this is a conversation to have now. If you are managing your own M365 relationship, log into the admin center, go to Billing then Subscriptions, and check the renewal date for each subscription.
Early renewal is not automatically the right call. If your seat count is inflated, locking in the current price on licenses you do not need is not a win. The smart play is to audit first, then decide.
The License Audit Play
This is where the real savings tend to live.
M365 deployments accumulate dead weight over time. Former employees whose accounts were never fully deprovisioned. Users licensed for Business Standard when Basic covers everything they actually do. Shared mailboxes set up as full user accounts. Add-ons that no one ordered intentionally but nobody removed either.
Running a meaningful audit involves a few steps:
- Export your full user list with last sign-in dates. Anyone with no login in the past 90 days is a candidate for removal or downgrade.
- Map active users to what they actually use. Email, Teams, and OneDrive only? Business Basic handles that. Full desktop Office apps plus compliance features? Standard or Premium.
- Identify shared and resource accounts configured as licensed users and convert them appropriately.
- Model the cost difference between your current plan mix and a right-sized one, both at current prices and at July prices.
This work requires access to the admin console, time, and enough familiarity with the M365 product family to make the right calls. For businesses with a managed IT services partner, this is exactly what that relationship is for. For businesses managing it internally, the Microsoft 365 admin center has the data. It just takes someone to pull it.
What to Actually Do Before June 30
Three concrete moves:
Find your renewal date. Microsoft 365 admin center, Billing section, Subscriptions. Note the date for every active subscription. If you are not doing this yourself, ask your IT partner when it is.
Run a license audit. Compare licensed seat count against users with 90-day sign-in activity. Any gap there is paying for something you are not using. Do this before any renewal decision.
Decide on plan mix. Not every user needs the same plan. Basic covers most email-and-Teams users. Standard adds the full Office app suite. Premium adds device management and security controls. With the price gap narrowing between Standard and Premium, some teams will find the upgrade math makes sense now in a way it did not a year ago.
Businesses with a managed IT partner should be getting this guidance proactively right now. If you have not heard anything about the July increase, that is worth a conversation.
For businesses without an IT partner, the window is real. June is close. The cost of doing nothing is $1.50 per user per month on Standard, starting with your next renewal.
Frequently Asked Questions
When does the Microsoft 365 price increase take effect?
July 1, 2026. Existing customers stay at current pricing until their next renewal after that date. New customers and renewing customers after July 1 pay the new rates.
Can I lock in current pricing by renewing early?
Often yes. Many Microsoft resellers and partners allow renewing before July 1 at current rates, locking in the existing price for another annual term. Whether this makes sense depends on your renewal date and current seat count. Talk to your Microsoft partner or IT provider before making the call.
Which Microsoft 365 plans are not going up in price?
Business Premium holds at $22 per user per month. Office 365 E1 holds at $10. If you are on Business Standard and considering an upgrade to Premium, the narrowing price gap makes it worth modeling.
What new features is Microsoft adding alongside the price increase?
Business Basic and Standard plans get 50GB of additional email storage, URL time-of-click phishing protection, and Copilot Chat improvements. Business Premium and E3 users gain Microsoft Defender for Office 365 Plan 1, Intune Remote Help, and Advanced Analytics. Microsoft says these features roll out by August 1, 2026.
How do I check if I am paying for licenses I do not need?
Log into the Microsoft 365 admin center. Under Users, look for accounts with no sign-in activity in the past 90 days. Compare that against your total licensed seat count. Any gap is likely waste. A managed IT provider can pull this report and model the right-sized cost against your current spend.