Microsoft 365 Price Increase: What Your Renewal Will Cost Now

Business Standard went from $12.50 to $14 per user per month. Business Premium stayed at $22. That single detail shapes most renewal conversations this year, because the gap between Standard and Premium shrank from $9.50 to $8, and “should we just move to Premium?” became a much easier question.

The new prices apply from 1 July 2026, according to Microsoft’s licensing announcement. Existing customers stay on their current price until renewal. If you have not seen the increase on an invoice yet, your term probably has not ended. For any company whose renewal falls in 2027, October is the right month to run the numbers.

What changed, plan by plan

The figures below are Microsoft’s US list prices (per user, per month, USD). In Türkiye, reseller pricing adds exchange rate and VAT, so your invoice will differ slightly.

Plan	Old	New	Increase
Business Basic	$6.00	$7.00	16%
Business Standard	$12.50	$14.00	12%
Business Premium	$22.00	$22.00	none
Apps for business	$8.25	$10.00	21%
Office 365 E3	$23.00	$26.00	13%
Office 365 E5	$38.00	$41.00	8%
Microsoft 365 E3	$36.00	$39.00	8%
Microsoft 365 E5	$57.00	$60.00	5%

Apps for business took the steepest percentage hit. Plenty of companies pick it as the cheap option because it has no hosted mailbox, and they got the biggest relative increase. Standalone products such as Copilot were not part of this update.

The yearly impact for 25 users

• Business Basic: 25 x $1 x 12 = $300
• Business Standard: 25 x $1.50 x 12 = $450
• Apps for business: 25 x $1.75 x 12 = $525
• Business Premium: $0

Not dramatic on their own. But moving the same office from Standard to Premium costs 25 x $8 x 12 = $2,400 a year, and Premium brings Defender for Business, Intune and conditional access. The real choice is between buying those layers, buying them somewhere else, or going without.

Use the renewal to question the plan

Three questions usually settle it:

1. Who actually needs which license? Accounts with no sign-in for 90 days, mailboxes of people who left, and shared mailboxes often need no license at all.
2. Are you paying for security elsewhere? If you run a separate endpoint product and a separate device management tool, Premium may come out cheaper in total.
3. Can you mix plans? Everyone in one tenant does not have to be on the same plan. Basic for field staff, Standard for the office and Premium for management is a common setup.

We covered ways to lower renewal cost in an earlier post, and the monthly versus annual commitment trade-off in the New Commerce article.

New features arriving with the increase

Microsoft is adding features to the plans, rolling out through the summer. From its published list:

• Business Basic, Standard and Premium: an extra 50 GB of mailbox storage and Copilot Chat improvements
• Business Basic and Standard: URL time-of-click protection
• Office 365 E3: Defender for Office Plan 1

This does not cancel out the price rise, but time-of-click link protection is a real gain for Basic and Standard users. If you bought a separate email security product just for that, the subscription is worth a second look.

FAQ

Will the increase hit my invoice immediately? Microsoft says existing customers keep current pricing until renewal. Monthly and annual commitments can behave differently, so confirm your own term date with your reseller.

Is security the only reason to choose Premium? Mostly, yes. With device management and endpoint protection in the same plan, you drop a product, a contract and a layer of admin work. For a small team that can matter more than the price gap.

Can I negotiate the price? List prices are fixed, but reseller payment terms, multi-year commitments and bundled service offers can change the total.

If you want us to map the license split in your tenant and prepare a before-and-after comparison, get in touch.