Microsoft 365 Price Increase July 2026 By Plan

Microsoft 365 suite list prices went up on July 1, 2026. Microsoft announced the change on December 4, 2025, seven months ahead, and most plans rose between $1 and $3 per user a month. Business Premium and Office 365 E1 did not change.

If your renewal lands after July 1, the new list price is the starting point for your next quote. Here is what changed, plan by plan, and what to do before you sign.

Key Facts

• Effective date: July 1, 2026, for commercial Microsoft 365 suites
• Announced: December 4, 2025
• Largest dollar rise: Office 365 E3, Microsoft 365 E3 and E5, each up $3 per user a month
• Largest percentage rise: Microsoft 365 F1, $2.25 to $3 (33%)
• Unchanged: Business Premium ($22) and Office 365 E1 ($10)

What Changed, Plan by Plan

All prices are Microsoft's published list prices per user per month for the versions that include Teams.

Percentages are our math from the two list prices, for example ($7 - $6) / $6 = 17%. Microsoft says suites sold without Teams rise by the same dollar amount. Prices apply globally with local market adjustments in some regions, and nonprofit pricing moves in line with commercial pricing. Government suites were announced separately.

Why Microsoft Says Prices Went Up

Microsoft ties the increase to features it is adding to the suites in 2026: Microsoft 365 Copilot Chat with agents inside Word, Excel and PowerPoint, plus security and device management tools that were previously sold as add-ons or in the Intune Suite. Microsoft also says it shipped more than 1,100 features across Microsoft 365, Security, Copilot and SharePoint in the past year.

That is Microsoft's case. The open question for each buyer is simpler: are your people using those features, or are you paying for them anyway?

Who Feels It Most

Frontline plans moved the most in percentage terms. F1 and F3 are often bought in large numbers for shift workers, so a 25% to 33% rise on a small per-user price can still add up across a big workforce.

Enterprise E3 and E5 rose less in percentage terms, but they carry the largest per-user bills, so $3 a month per user is the change most finance teams will notice first.

Small businesses on Business Basic or Business Standard see a $1 to $1.50 rise per user a month. Business Premium customers see no list price change.

What To Do Before Your Renewal

1. Find your renewal date. Annual agreements usually keep current pricing until the term ends. The new list price applies to what you sign next.
2. Count active users, not licenses. Unused licenses cost more after July 1 than before. Remove them before the true-up.
3. Check plan fit. Some teams on E3 or E5 only use mail, files and Teams. A lower plan or a mix of plans may cover them.
4. Ask about multi-year terms. A longer commitment can hold a price, but only commit for users you are confident you will keep.
5. Compare what you actually use. If Copilot Chat or the new management tools replace something you already pay for, that is real value. If not, ask your partner what the increase buys you.

Where This Does Not Apply

If you are mid-term on a multi-year agreement, your price likely holds until renewal. Customers who buy through a partner may see different terms and discounts than the list prices above. Regional prices may differ from the US list.

How Microsoft Compares on HissingKitty

See what buyers say about Microsoft on the Microsoft company page, including alternatives and the live Hate Index share. Track this and other increases on Price Radar, and see how often vendors raise prices on the Hate Index.

Does This Apply to You?

• Do you renew a Microsoft 365 agreement after July 1, 2026?
• Do you pay for more licenses than people who log in each month?
• Are you on E3 or E5 for users who only need email and files?
• Have you checked whether Copilot Chat replaces a tool you already buy?

If you answered yes to two or more, run a spend audit before your renewal call. And if you pay for Microsoft 365, write a review so other buyers can see what teams really pay.

Source: Microsoft 365 blog, December 4, 2025.