What changes on 1 July 2026
On 4 December 2025, Microsoft announced higher list prices for its commercial Microsoft 365 suites. The new prices take effect on 1 July 2026. That leaves roughly six weeks – enough time to tidy up your licences and plan your renewal deliberately rather than simply absorbing the increase.
According to Microsoft’s official overview, existing subscriptions keep their current price until the next renewal. New orders, additional licences and renewals from 1 July onwards are billed at the new price. Standalone Teams and Copilot licences are not part of this change.
Which plans go up, and by how much
For small and medium-sized businesses, the Business plans matter most. Microsoft lists the following prices in US dollars per user per month (versions including Teams):
| Plan | Current | From 1 July 2026 |
|---|---|---|
| Business Basic | USD 6.00 | USD 7.00 |
| Business Standard | USD 12.50 | USD 14.00 |
| Business Premium | USD 22.00 | USD 22.00 (unchanged) |
According to Microsoft, the versions without Teams rise by the same dollar amount (Business Basic from USD 4.40 to 5.40, Business Standard from USD 9.29 to 10.79). Enterprise plans are going up too – Office 365 E3, for example, from USD 23 to 26 and Microsoft 365 E3 from USD 36 to 39. Office 365 E1 stays the same.
A note on euro prices: the table shows US list prices. What you actually pay in Austria depends on how you buy (directly from Microsoft or through a partner), your term and your billing frequency. Microsoft itself refers to adjustments for local markets. So base your planning on your own invoices and your licensing partner’s quote, not on converted dollar figures.
Why Microsoft is raising prices
In its announcement blog post, Microsoft points to the added functionality: it says it released more than 1,100 features across Microsoft 365, Security, Copilot and SharePoint in the past year. New security and management features are also being added to the plans from June 2026 – for Business Basic and Standard, for instance, checks of links in emails and Office apps against known malicious websites, and Copilot Chat enhancements for all plans. Whether these additions are worth it for your business is a separate question; the bill goes up either way.
Review your licences: where you can save
A price increase is a good reason for a licence review. Many businesses find:
- Unused licences: former staff whose accounts were never removed, test accounts, or mailboxes that only forward mail.
- Duplicate licences: users with two plans, or with add-ons whose features their main plan already includes.
- Shared mailboxes with a full licence: a mailbox such as office@ often doesn’t need its own user licence if it is set up as a shared mailbox.
The right plan for each role
Not everyone needs the same plan. As a rough guide:
- Business Basic: web versions of the Office apps, email, Teams and OneDrive. Suits staff who work mainly in the browser or on a phone.
- Business Standard: adds the installable desktop apps (Word, Excel, Outlook and so on).
- Business Premium: everything in Standard plus, according to Microsoft, Microsoft Intune for device management, Microsoft Defender for Business for endpoint protection and Microsoft Entra ID P1 with Conditional Access. Business Premium is limited to 300 users.
That last point deserves attention. Because Business Premium isn’t going up, the list-price gap to Business Standard shrinks from USD 9.50 to USD 8. If you want to manage devices centrally, allow sign-ins only from known devices and protect endpoints properly, now is a good time to run the numbers. Premium often replaces add-on products you currently pay for separately. There is no one-size-fits-all answer, though – it depends on the security requirements your business actually has.
Time your renewal and term carefully
What matters is when your subscription renews. With an annual term, the price is fixed for the whole term. If your renewal falls shortly after 1 July, it may be worth asking your licensing partner whether renewing or changing plans before the deadline is possible. Bear in mind that an annual commitment usually also means you cannot reduce licence numbers during the term. Monthly terms are more flexible but generally cost more.
So clean up first and renew afterwards – otherwise you lock in surplus licences for another year.
Plan your budget
For the 2026/27 budget, a simple calculation will do: number of licences per plan × price difference × twelve months. For a team with 20 Business Standard licences, that comes to around USD 360 a year in extra cost at list prices – before tax and any partner terms. Factor in the increase from the month your subscription renews, not across the board from July.
Checklist before 1 July 2026
- Export a licence overview from the Microsoft 365 admin centre
- Remove unused and duplicate licences; check shared mailboxes
- Decide on the right plan for each role (Basic, Standard, Premium)
- Run the numbers on Business Premium if device management and security are on your list
- Note the renewal date and term of every subscription
- Ask your licensing partner whether renewing before the deadline makes sense
- Add the extra cost to your budget from each renewal month
How IT United can help
We go through the licences in your Microsoft 365 tenant with you, identify unused ones and suggest a suitable plan for each role. If Business Premium is an option for you, we can also plan the set-up of Intune and Conditional Access. Find out more about our cloud and Microsoft 365 services and IT consulting.
Would you like your licences reviewed before 1 July? Book a free initial consultation and we’ll get back to you.
