Microsoft 365 Price Hike Now Affects Business and Enterprise Renewals

Microsoft 365 price hike is now affecting business and enterprise customers, with higher renewal bills starting from July 1, 2026.

Microsoft first announced the pricing update in December 2025. The company describes it as a “packaging and pricing update” and says the higher prices reflect new AI, security, and IT management features added to Microsoft 365 over the past year.

The change affects Microsoft 365 Business, Enterprise, Frontline, and Government suites. Microsoft 365 Personal and Education pricing will not change for now.

Microsoft 365 Business Plans Get Higher Prices

Microsoft 365 Business Basic now costs $7 per user per month, up from $6. That is a 16% increase.

Business Standard rises from $12.50 to $14 per user per month, a 12% increase. Business Premium remains unchanged at $22 per user per month.

The Business Basic plan without Teams sees a larger increase of 23%, making the no-Teams version one of the more sharply affected business plans.

Microsoft says the higher business pricing comes with extra value, including Copilot Chat improvements, URL time-of-click protection, and more mailbox storage for some users.

Enterprise Microsoft 365 Plans Also Increase

Microsoft is also raising prices across several enterprise plans.

Office 365 E3 increases from $23 to $26 per user per month. Office 365 E5 rises from $38 to $41.

Microsoft 365 E3 goes from $36 to $39, while Microsoft 365 E5 increases from $57 to $60.

Office 365 E1 remains unchanged at $10 per user per month. Microsoft 365 E7, the newer Frontier suite, is not part of this pricing update.

Frontline Plans See Some of the Biggest Increases

Frontline worker plans face some of the steepest price hikes.

Microsoft 365 F1 jumps from $2.25 to $3 per user per month, which marks a 33% increase. Microsoft 365 F3 rises from $8 to $10, a 25% increase.

The no-Teams version of Microsoft 365 F1 rises by 43%.

These changes stand out because Frontline plans target workers who usually need lower-cost licensing. The higher prices could affect companies with large retail, healthcare, logistics, manufacturing, or field service teams.

Some Standalone Add-Ons Are Also Getting More Expensive

Microsoft is also increasing prices for selected standalone add-ons and device-based licenses.

Windows Enterprise per-device licensing rises from $5.85 to $7.63, a 31% increase. Microsoft 365 Apps per device increases from $36 to $42, up 17%.

Entra Plan 1 and EMS E3 are also getting double-digit price increases.

These changes mean some organizations could see higher costs beyond their core Microsoft 365 subscription renewals.

Government and Nonprofit Customers Are Affected Too

Nonprofit customers are also included in the pricing changes. However, Microsoft says nonprofits already receive fixed discounts of 60% to 75% off commercial rates.

Government customers using GCC, GCC High, and DoD clouds will see similar percentage increases to commercial customers.

US AGC pricing is not affected.

For government customers, Microsoft says price increases above 10% will phase in over several years to comply with federal rules.

Microsoft Adds New Security Features to Justify the Price Hike

Microsoft is adding several security features as part of the pricing update.

Office 365 E3 and Microsoft 365 E3 are getting Microsoft Defender for Office 365 Plan 1. Office 365 E1, Business Basic, and Business Standard are getting URL time-of-click protection.

This feature scans links when users click them, not only when the email first arrives. That helps protect users from links that become dangerous after delivery.

Microsoft 365 E3 and E5 tenants are also getting more Intune features bundled into their plans. These include Intune Remote Help, Intune Advanced Analytics, and Intune Plan 2.

E5 customers also get Intune Endpoint Privilege Management, Microsoft Cloud PKI, and Enterprise Application Management.

Microsoft 365 E5 Adds Security Copilot

Microsoft 365 E5 is also getting Microsoft Security Copilot.

The plan will include 400 Security Compute Units per month for every 1,000 licenses. Microsoft caps the allowance at 10,000 SCUs.

This shows how central AI has become to Microsoft’s pricing strategy. The new pricing tables also reference plans “with Copilot,” suggesting that AI features form a major part of the company’s justification for charging more.

Copilot Chat Improvements Are Coming to Affected Suites

Every affected suite is getting Copilot Chat improvements.

These include inbox and calendar awareness, along with access to Word, Excel, and PowerPoint agents.

Business Basic and Business Standard users are also getting an extra 50GB of mailbox storage.

Microsoft appears to be using these additions to make the price hike easier to accept, especially for businesses that already rely heavily on Microsoft 365 apps.

Renewal Timing Matters for Customers

Microsoft says the packaging changes began in June 2026 and should finish rolling out by August 1, 2026.

Customers should receive a 30-day notice through the Message Center.

Organizations that renewed before July 1 will keep their previous price until the next renewal. However, those customers still receive the new features before their pricing changes.

That means the immediate cost impact depends on each customer’s renewal date.

For businesses with large Microsoft 365 deployments, the July 2026 renewal cycle could bring a noticeable jump in software spending.

In other news, Microsoft 365 Copilot received several new features in June, and Microsoft Teams also gained new updates.

Via Windows Latest