If your business runs on Microsoft 365, here’s something to put on your radar. Microsoft has announced a global pricing and packaging update for most of its commercial Microsoft 365 SKUs, with pricing changes taking effect July 1, 2026 and new features rolling out beginning in June.
This is the first major commercial M365 price adjustment in several years, and it affects nearly every plan tier from Business Basic through Enterprise E5, along with the Frontline (F1/F3) and Government equivalents. Standalone Microsoft Teams and Copilot SKUs are not part of this update.
We’ve put together a breakdown of what’s changing, what’s being added, and what (if anything) you should do before your next renewal.
The pricing changes at a glance
For most small and mid-sized businesses running Microsoft’s Business suite, here’s where pricing lands as of July 1:
| Plan | Old Price | New Price | Change |
|---|---|---|---|
| Microsoft 365 Business Basic | $6.00 | $7.00 | +16% |
| Microsoft 365 Business Standard | $12.50 | $14.00 | +12% |
| Microsoft 365 Business Premium | $22.00 | $22.00 | No change |
(All prices per user, per month, USD.)
On the Enterprise side, Office 365 E3 jumps from $23 to $26 (13%), Microsoft 365 E3 goes from $36 to $39 (8%), and Microsoft 365 E5 moves from $57 to $60 (5%). The steepest percentage increases land on the Frontline plans, with F1 moving from $2.25 to $3.00 (33%) and F3 from $8.00 to $10.00 (25%).
Several standalone components are also affected. Microsoft 365 Apps moves from $12 to $14 per user (17%), Windows E3 from $6.63 to $7.63 (15%), and Entra Plan 1 from $6 to $7 (16%). Enterprise Mobility + Security (EMS) E3 climbs from $10.60 to $12 (13%).
What you’re getting in return
This isn’t just a price increase. Microsoft is bundling additional capabilities into the existing SKUs, with rollout running from June through August 1, 2026. Some of the bigger additions:
For Business Basic, Standard, and Premium customers
- An extra 50GB of mailbox storage
- URL time-of-click protection (a phishing defense layer that scans links when users click them, not just when emails arrive) for Basic and Standard
- Copilot Chat enhancements, including inbox and calendar awareness, plus access to Word, Excel, and PowerPoint agents
- Copilot Chat Analytics
For Microsoft 365 E3 customers
- Microsoft Defender for Office Plan 1
- Intune Remote Help, Intune Advanced Analytics, and Intune Plan 2
- Copilot Chat enhancements and Analytics
For Microsoft 365 E5 customers (in addition to the E3 additions)
- Microsoft Security Copilot
- Intune Endpoint Privilege Management
- Microsoft Cloud PKI
- Intune Enterprise Application Management
For most organizations, the practical effect is that several tools previously sold as add-ons are now part of the base license. Whether that math works out in your favor depends on what you’re already paying for separately.
When it actually hits you
A few timing details worth knowing:
- New customers pay the new prices starting July 1, 2026.
- Existing customers remain on current pricing until renewal. If your agreement renews in August 2026, you’ll see the new pricing then. If it renews in March 2027, that’s when it applies.
- Packaging updates (the new features) begin rolling out in June 2026 and finish by August 1, 2026, regardless of your renewal date.
- Microsoft will post at least 30 days notice in your Message Center before the packaging changes land in your tenant.
That renewal-protection window is the most important detail in the whole announcement. If you’re up for renewal between now and the changes taking effect, there’s room to think strategically about term length, plan mix, and whether any of the newly bundled features replace something you’re paying for separately today.
What to do now
A few things worth doing in the next 60 to 90 days:
- Pull your current M365 inventory. Know which SKUs you’re on, how many of each, and when your term renews.
- Identify standalone add-ons that may now be included. If you’re paying separately for Defender for Office Plan 1, Intune Plan 2, or Cloud PKI, your new bundle may already cover them.
- Look closely at your Frontline licensing if you use it. The 25 to 33 percent increases on F1 and F3 are the steepest in this update and worth modeling out.
- Talk to us before renewal. Even small changes in plan mix can shift the total cost meaningfully when you have 25, 50, or 200 users on the line.
We’re already working through this with several clients ahead of their 2026 renewals. If you’d like a walkthrough of how the changes apply to your environment, reach out and we’ll set up a quick review.
For Microsoft’s full pricing tables, including non-profit and government variants, see the Microsoft 365 Pricing and Packaging Updates page on Microsoft’s Licensing site.
