Microsoft 365 Prices Are Going Up July 1, 2026. Here’s What Business Owners Should Know.
This is a mistake.
Too many businesses treat Microsoft 365 licensing as a “set it and forget it” expense. Email works. Teams works. Files are in OneDrive or SharePoint. Employees have Word, Excel, Outlook, and the tools they need. So nobody looks too closely at it.
But Microsoft 365 is not just another software subscription anymore. It is where your business communicates, stores files, shares client information, approves payments, collaborates internally, and protects critical company data.
That is why Microsoft’s upcoming price increase on July 1, 2026 should not just be viewed as a billing issue. It should be viewed as a good reason to review your Microsoft 365 licensing, security, and overall risk.
What Is Changing for Microsoft 365 Business Plans?
For many small and mid-sized businesses, the most common Microsoft 365 plans are Business Basic, Business Standard, and Business Premium. Microsoft’s July 1, 2026 pricing update changes the annual-commitment pricing for Business Basic and Business Standard. Business Premium is not currently listed as increasing in this update.
Annual commitment means the business is committing to the license for the year, even if it pays monthly. This is different from true month-to-month licensing, which generally costs more but gives the business more flexibility.
Annual Commitment Pricing – Microsoft 365 Business Plans With Teams
| Plan | Old Price | New Price July 1, 2026 | Increase | % Change |
|---|---|---|---|---|
| Microsoft 365 Business Basic | $6.00/user/month | $7.00/user/month | +$1.00 | 16% |
| Microsoft 365 Business Standard | $12.50/user/month | $14.00/user/month | +$1.50 | 12% |
| Microsoft 365 Business Premium | $22.00/user/month | $22.00/user/month | No increase | |
Month-to-Month Pricing Needs a Clarification
Microsoft’s July 1, 2026 pricing table clearly lists the annual-commitment increases. Microsoft’s public pricing also shows that true month-to-month subscriptions currently cost more than annual-commitment subscriptions. For planning purposes, the table below estimates the new month-to-month prices using Microsoft’s current 20% monthly subscription premium. Businesses should confirm final pricing at renewal.
True Month-to-Month Pricing – Microsoft 365 Business Plans With Teams
| Plan | Old Month-to-Month Price | New / Estimated Price | Increase | Status |
|---|---|---|---|---|
| Microsoft 365 Business Basic | $7.20/user/month | $8.40*/user/month | +$1.20 | Estimated |
| Microsoft 365 Business Standard | $15.00/user/month | $16.80*/user/month | +$1.80 | Estimated |
| Microsoft 365 Business Premium | $26.40/user/month | $26.40*/user/month | No increase | Estimated |
* Microsoft has not clearly published the exact new true month-to-month prices in the July 1, 2026 update table. These month-to-month new prices are planning estimates based on Microsoft’s current 20% monthly subscription premium. Confirm final pricing at renewal.
Other Microsoft License Increases Businesses Should Know About
The July 1, 2026 update is broader than Business Basic and Business Standard. Microsoft also lists increases for several Enterprise, Frontline, and standalone Microsoft licenses, including Office 365 E3 and E5, Microsoft 365 E3 and E5, Microsoft 365 F1 and F3, Windows E3 and E5, Microsoft 365 Apps, Enterprise Mobility + Security, and Entra Plan 1 and Plan 2.
This matters because many businesses have a mix of licenses. Even if a company mainly uses Microsoft 365 Business plans, it may also have standalone licenses for apps, identity, device management, Windows, or security.
Other Microsoft License Price Increases Effective July 1, 2026
| Category | License | Old Price | New Price | Increase | % Change |
|---|---|---|---|---|---|
| Enterprise | Office 365 E3 | $23.00 | $26.00 | +$3.00 | 13% |
| Enterprise | Office 365 E5 | $38.00 | $41.00 | +$3.00 | 8% |
| Enterprise | Microsoft 365 E3 | $36.00 | $39.00 | +$3.00 | 8% |
| Enterprise | Microsoft 365 E5 | $57.00 | $60.00 | +$3.00 | 5% |
| Frontline | Microsoft 365 F1 | $2.25 | $3.00 | +$0.75 | 33% |
| Frontline | Microsoft 365 F3 | $8.00 | $10.00 | +$2.00 | 25% |
| Standalone | Windows E3 | $6.63 | $7.63 | +$1.00 | 15% |
| Standalone | Apps for Business | $8.25 | $10.00 | +$1.75 | 21% |
| Standalone | EMS E3 | $10.60 | $12.00 | +$1.40 | 13% |
| Standalone | Entra Plan 1 | $6.00 | $7.00 | +$1.00 | 16% |
| Standalone | Windows Enterprise per device | $5.85 | $7.63 | +$1.78 | 31% |
| Standalone | Windows E5 | $11.81 | $12.81 | +$1.00 | 9% |
| Standalone | Microsoft 365 Apps | $12.00 | $14.00 | +$2.00 | 17% |
| Standalone | EMS E5 | $16.40 | $18.00 | +$1.60 | 10% |
| Standalone | Entra Plan 2 | $9.00 | $10.00 | +$1.00 | 11% |
| Standalone | Microsoft 365 Apps per device | $36.00 | $42.00 | +$6.00 | 17% |
Why This Matters
At first glance, a $1 or $1.50 increase per user may not seem like much. But across 25, 50, or 100 employees, the numbers add up quickly. The bigger issue is that many companies have not reviewed their Microsoft 365 licensing in years.
They may be paying for former employees, unused accounts, duplicate licenses, or plans that no longer fit how the business works. They may also have employees on lower-cost plans who actually need stronger protection.
The Bigger Issue Is Security
Microsoft 365 is where your business keeps email, files, Teams messages, SharePoint data, client information, invoices, and internal conversations. One compromised account can lead to fake invoice scams, wire fraud, stolen client information, ransomware exposure, downtime, and reputational damage.
For many businesses, the problem is not that Microsoft 365 is insecure. The problem is that it is not configured securely. Multi-factor authentication may not be enforced correctly. Admin accounts may not be properly protected. File sharing may be too open. Old users may still exist. Devices may not be managed. Backups may not be in place.
What Business Owners Should Review Before Renewal
Before your next Microsoft 365 renewal, review every active license, compare annual commitment versus month-to-month pricing, match each license to the user’s role and risk, review Microsoft 365 security settings, and confirm your renewal date.
Do not just review the cost. Review the risk.
Final Thought
Nobody likes a price increase. But this one can be useful if it pushes business owners to finally review their Microsoft 365 environment. A simple Microsoft 365 license and security review can often uncover wasted spending, reduce risk, and give business owners a much clearer picture of where they stand.
If you are not sure whether your Microsoft 365 licensing is set up correctly, or whether your environment is properly protected, First Class Networks can help you review it and give you straight answers. No pressure. Just practical guidance. Stay safe and stay secure.
