Microsoft 365 price increases take effect July 1, 2026, with most Microsoft 365 and Office 365 Enterprise plans increasing 5%–16% and Microsoft 365 F1/F3 plans increasing 25%–43%.
The changes are part of broader Microsoft 365 licensing and packaging updates that add more AI, security, compliance, and IT management capabilities into core plans.
What Should You Do Right Now?
The following table summarizes key pricing adjustments announced for July 2026.
Pricing shown reflects annual commitment with monthly billing. Actual pricing may vary by region, agreement type, and purchasing channel.
| Plan | 2025 Price | 2026 Price | Change |
| Office 365 E3 (with Teams) | $23 | $26 | 13% |
| Office 365 E3 (no Teams) | $14.45 | $17.45 | 14% |
| Office 365 E5 (with Teams) | $38 | $41 | 8% |
| Office 365 E5 (no Teams) | $29.45 | $32.45 | 10% |
| Microsoft 365 E3 (with Teams) | $36 | $39 | 8% |
| Microsoft 365 E3 (no Teams) | $27.45 | $30.45 | 11% |
| Microsoft 365 E5 (with Teams) | $57 | $60 | 5% |
| Microsoft 365 E5 (no Teams) | $48.45 | $51.45 | 6% |
| Plan | 2025 Price | 2026 Price | Change |
| Microsoft 365 Business Basic (with Teams) | $6 | $7 | 16% |
| Microsoft 365 Business Basic (no Teams) | $4.40 | $5.40 | 23% |
| Microsoft 365 Business Standard (with Teams) | $12.50 | $14 | 12% |
| Microsoft 365 Business Standard (no Teams) | $9.29 | $10.79 | 16% |
| Microsoft 365 Business Premium (with Teams) | $22 | $22 | No change |
| Microsoft 365 Business Premium (no Teams) | $18.79 | $18.79 | No change |
| Plan | 2025 Price | 2026 Price | Change |
| Microsoft 365 F1 (with Teams) | $2.25 | $3 | 33% |
| Microsoft 365 F1 (no Teams) | $1.75 | $2.50 | 43% |
| Microsoft 365 F3 (with Teams) | $8 | $10 | 25% |
| Microsoft 365 F3 (no Teams) | $6.93 | $8.93 | 29% |
The Microsoft 365 licensing changes apply to:
Not included:
Microsoft’s 2026 licensing update represents a broader evolution of the Microsoft platform.
Microsoft is moving toward more integrated licensing bundles that combine productivity, security, AI, compliance, and management capabilities into fewer, more comprehensive offerings.
What’s changing?
| Plan | Feature additions |
| Office 365 E1 | SafeLinks Lite, Copilot Chat enhancements*, Copilot Chat Analytics |
| Office 365 E3 | MDO P1, Copilot Chat enhancements*, Copilot Chat Analytics |
| Office 365 E5 | Copilot Chat enhancements*, Copilot Chat Analytics |
| Microsoft 365 E3 | MDO P1, Intune Remote Help, Intune Advanced Analytics, Intune P2, Copilot Chat enhancements*, Copilot Chat Analytics |
| Microsoft 365 E5 | In addition to M365 E3 additions: Microsoft Security Copilot, Intune Endpoint Privilege Management, Microsoft Cloud PKI, Intune Enterprise Application Management |
| Microsoft 365 F1 and F3 | Copilot Chat enhancements*, Copilot Chat Analytics |
| Microsoft 365 Business Basic and Standard | +50GB email, SafeLinks Lite, Copilot Chat enhancements*, Copilot Chat Analytics |
| Microsoft 365 Business Premium | +50GB email, Copilot Chat enhancements*, Copilot Chat Analytics |
The price increases are modest when viewed in isolation, but they reflect a broader shift in how Microsoft delivers value.
From Microsoft’s own positioning:
This means many organizations may be paying slightly more per license while simultaneously reducing spending on overlapping third-party solutions.
Under the new pricing structure, Microsoft 365 E5 increases from $57 to $60 per user per month, representing a 5% increase.
For many organizations, E5 continues to provide substantial value because Microsoft continues expanding capabilities across:
Organizations already licensing multiple security and compliance add-ons should evaluate whether consolidating into E5—or potentially E7—creates a lower total cost of ownership.
Microsoft 365 Frontline plans are seeing some of the largest percentage increases in the 2026 update.
Microsoft 365 F1 increases from $2.25 to $3.00 per user/month, while Microsoft 365 F3 increases from $8.00 to $10.00 per user/month.
For organizations with large frontline workforces, these changes can create a meaningful renewal impact.
Alongside these pricing updates, Microsoft has introduced Microsoft 365 E7, a new top-tier package that bundles the latest AI, security, and compliance capabilities into a single license.
For organizations aggressively investing in AI, cybersecurity, and governance, E7 provides another option when evaluating whether to continue layering add-ons onto existing E3 and E5 deployments.
See how E7 compares to E5.
If your renewal is after July 1, 2026, you will transition to the new pricing.
Audit license usage: Review assigned licenses versus active usage to identify waste and reclaim unused subscriptions.
Identify tool overlap: Many organizations continue paying for third-party solutions that duplicate capabilities already included in Microsoft 365.
Align licensing with business outcomes: Licensing decisions should support AI readiness, security maturity, compliance requirements, and your long-term technology strategy.
Evaluate renewal timing: Organizations may be able to lock in current pricing before future increases depending on contract options available through their licensing program.
ProArch helps organizations turn Microsoft’s changes into clear, cost-effective decisions.
We can help you:
See how ProArch can help: Microsoft 365 Licensing Cost Optimization & Renewal Services
What is the Microsoft 365 price increase for 2026?
Most Microsoft 365 and Office 365 Enterprise plans are increasing between 5% and 16%, while Frontline F1 and F3 plans increase between 25% and 43%.
When does Microsoft 365 new pricing start?
Microsoft’s updated pricing becomes effective July 1, 2026. Packaging updates begin in June 2026.
Which Microsoft 365 plans are affected?
The changes impact Microsoft 365 E3, Microsoft 365 E5, Office 365 E3, Office 365 E5, Microsoft 365 Business plans, Frontline plans, EMS, Windows Enterprise, Apps, and Entra-related SKUs.
What is the new Microsoft 365 E5 price?
Microsoft 365 E5 increases from $57 to $60 per user per month.
How much are Microsoft F1 and F3 licenses increasing?
Microsoft has indicated increases ranging from 25% to 43% for Frontline licensing.
Is Microsoft 365 E7 replacing E5?
Microsoft has introduced E7 as a new premium licensing option, but the available source does not state that E5 is being replaced.
Should organizations review licensing before renewal?
Yes. Organizations should evaluate utilization, eliminate waste, review opportunities for consolidation, and align licensing to business outcomes before renewal discussions begin.
How can organizations reduce Microsoft licensing costs?
Organizations can reduce overall licensing costs by identifying unused licenses, eliminating overlapping tools, and aligning Microsoft investments to actual business needs.