Microsoft 365 Price Increase 2026: Old vs New Prices, and What It Costs Your Team

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If your Microsoft 365 invoice looked a little higher this year, you didn’t imagine it. Microsoft raised the list price of most of its business and enterprise plans on July 1, 2026. It announced the change in December 2025, so plenty of businesses only noticed when their annual renewal came around.

We went back to Microsoft’s own price table to check the numbers, because the coverage hasn’t been consistent. Here’s what actually changed, what your team will pay, and whether it’s a reason to look at Google Workspace.

The Microsoft 365 price increase: what changed on July 1, 2026

Microsoft published the new prices in its December 2025 announcement. Its own words: “The following list price changes will go into effect on July 1, 2026.”

The small-business plans:

Enterprise and frontline plans moved too. Office 365 E1 stayed at $10. Office 365 E3 went from $23 to $26, Microsoft 365 E3 from $36 to $39 and E5 from $57 to $60. The biggest jumps in percentage terms were on frontline plans: F1 went from $2.25 to $3 and F3 from $8 to $10.

Two details are easy to miss. These prices are for the versions that include Teams. Microsoft says the versions without Teams get “an equivalent dollar value increase”. And outside the US, prices follow “local market adjustments”, so your local-currency price won’t be a straight conversion. Check Microsoft’s page for your country.

Some reports got the numbers wrong

A few articles from late 2025 gave different figures. Heise, for example, reported that Business Basic would rise to $7.50 and Business Premium to $24.50. Microsoft’s own table says $7 and $22. If you’re budgeting, use Microsoft’s figures, or the price in your own admin center, and ignore round-ups that don’t link to the source.

What you get for the extra money

Microsoft ties the increase to features it has added and is adding. For the small-business plans, its announcement lists:

• Copilot Chat improvements, plus security, management and analytics controls for Copilot Chat, on Basic, Standard and Premium.
• URL checks in Outlook and the Office apps, which warn about known malicious links, on Basic and Standard. Premium isn’t listed for this one.
• 50 GB more email storage on Basic, Standard and Premium.

Whether that’s worth $1 to $1.50 per person a month depends on how you work. The extra mailbox space matters if your team keeps years of email. The URL checks are useful for small teams without a security tool. Copilot Chat is the free chat assistant, not the paid Microsoft 365 Copilot add-on, so don’t expect AI inside Word and Excel from this alone.

What the increase costs a small team

Multiply it out and the change is modest for small teams, but it adds up:

Business Premium customers pay nothing extra. That makes Premium relatively better value than it was, especially for teams that were already thinking about better device security.

When the new price hits you

It depends on your renewal date, not on today’s date. In its June 2026 partner notice, Microsoft told resellers to “encourage customers to renew before July 1 so they can retain current pricing.” So:

• If your annual subscription renewed before July 1, 2026, you pay the old price until that year is up.
• If it renews on or after July 1, the new price applies from that renewal.
• New subscriptions bought after July 1 are at the new price.

To find your date, open the Microsoft 365 admin center, go to Billing → Your products, and check the renewal date for each subscription. If you buy through a reseller, ask them. Resellers can offer their own discounts, so the price on your invoice may differ from the list price.

The Copilot bundles

Microsoft is pushing small businesses toward bundles with Copilot built in. From July 1, 2026, according to Microsoft’s partner notice:

• Business Standard with Copilot lists at $23.50 per user a month.
• Business Premium with Copilot lists at $32.
• A promotion bundles Business Basic with Copilot Business at $21 per user a month (after 25% off) until December 31, 2026.
• Copilot Business on its own is $18 per user a month after a 15% promotion, also until December 31, 2026.

Those promotions are on annual subscriptions. If nobody on your team would use Copilot every week, the plain plan is the better deal.

Microsoft 365 vs Google Workspace: same prices now

Here’s the part we didn’t expect. After the increase, Microsoft’s three small-business tiers have the same US list prices as Google Workspace’s: $7, $14 and $22 per user a month, according to Google’s pricing page.

So price alone is no longer a reason to pick one. The real differences:

• Desktop apps. Microsoft 365 Business Standard and Premium include the installable Word, Excel, PowerPoint and Outlook. Google Workspace runs in the browser. If your clients send complex Excel files, that matters.
• Email. Outlook and Exchange on one side, Gmail on the other. Most people already have a strong preference.
• Storage. Google lists pooled storage of 30 GB per user on Starter, 2 TB on Standard and 5 TB on Plus.
• New-customer price. Google currently shows introductory prices of $6.30 (Starter) and $12.60 (Standard) for new customers, for the first 12 months and up to 20 users. After that, the full price applies.
• Team size. Google’s Starter, Standard and Plus plans are limited to 300 users.

Should you switch or change plans?

For most small teams, no. Moving email, files and calendars between Microsoft and Google takes real time, and a $1 to $1.50 increase per person won’t pay for that. A few situations where it’s worth a look:

• You pay for Standard but only use the web apps. Business Basic now costs $7. If nobody installs the desktop apps, that’s $84 a year saved per person.
• You were about to buy a security add-on. Premium didn’t go up, so the gap between Standard and Premium shrank from $9.50 to $8.
• You’re starting from scratch. With equal list prices, pick the one your team already knows. Google’s first-year discount makes it slightly cheaper to start.

If you do want to switch, plan around your renewal date. Leaving in the middle of an annual commitment usually means paying for the rest of the term anyway.

And if the only thing you need is an email address on your own domain that forwards to an inbox you already have, you may not need either suite. Forwarding is free: see our ImprovMX vs Cloudflare Email Routing comparison. Reviewing the rest of your team’s subscriptions too? We’ve priced out ClickUp vs monday.com and Trello vs Asana for a 5-person team.

Sources

• Microsoft: Advancing Microsoft 365, new capabilities and pricing update (December 4, 2025, updated March 18, 2026)
• Microsoft Partner Center: June 2026 announcements
• Google Workspace pricing

Prices checked October 28, 2026.

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