Microsoft’s 2026 Microsoft 365 pricing and packaging update took effect on July 1, 2026. It was announced on December 4, 2025. The important line for most customers: existing customers stay on current pricing until renewal. So the real impact depends on when your agreements renew. Prices below are Microsoft’s published US dollar list prices per user per month; Microsoft notes pricing may vary by country and currency.
Key dates
- July 1, 2026: new commercial pricing in effect.
- June 2026: packaging changes began rolling out, with certain features finishing by August 1, 2026.
- Notice: at least 30 days in the Message Center before packaging changes appear in a tenant.
- Not included: standalone Microsoft Teams and Copilot SKUs.
Business plans
| Plan | Old | New | Change |
|---|---|---|---|
| Business Basic (with Teams) | $6.00 | $7.00 | +16% |
| Business Standard (with Teams) | $12.50 | $14.00 | +12% |
| Business Premium (with Teams) | $22.00 | $22.00 | no change |
| Business Basic (no Teams) | $4.40 | $5.40 | +23% |
| Business Standard (no Teams) | $9.29 | $10.79 | +16% |
| Business Premium (no Teams) | $18.79 | $18.79 | no change |
Enterprise and frontline plans
| Plan | Old | New | Change |
|---|---|---|---|
| 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% |
| Office 365 E3 (no Teams) | $14.45 | $17.45 | +21% |
| Microsoft 365 E3 (no Teams) | $27.45 | $30.45 | +11% |
| Microsoft 365 F1 (with Teams) | $2.25 | $3.00 | +33% |
| Microsoft 365 F3 (with Teams) | $8.00 | $10.00 | +25% |
| Microsoft 365 F1 (no Teams) | $1.75 | $2.50 | +43% |
Office 365 E1 is listed with no change. Microsoft also lists increases for components, such as Microsoft 365 Apps ($12 to $14, +17%), Windows E3 ($6.63 to $7.63), EMS E3 ($10.60 to $12.00) and Entra Plan 1 ($6.00 to $7.00), and new standalone listings for the Purview Suite and Defender Suite at $12.00 each.
What you get for it
- Copilot Chat enhancements and Copilot Chat Analytics across E1, E3, E5, F1, F3 and the Business plans. Microsoft says the enhancements include inbox and calendar awareness and access to Word, Excel and PowerPoint agents.
- Office 365 E3 and Microsoft 365 E3: Microsoft Defender for Office Plan 1.
- Microsoft 365 E3: also Intune Remote Help, Intune Advanced Analytics and Intune Plan 2.
- Microsoft 365 E5: all E3 additions plus Security Copilot, Intune Endpoint Privilege Management, Microsoft Cloud PKI and Intune Enterprise Application Management.
- Business Basic and Standard: 50 GB more email and URL time-of-click protection. Business Premium: 50 GB more email.
- Windows E3: Quick Machine Recovery and post-quantum security APIs.
Government and nonprofit
Government pricing follows the commercial changes: Microsoft 365 G3 up 8% and G5 up 5%, with increases above 10% phased over multiple years under federal regulations. Government packaging arrives later, after compliance validation. Nonprofit prices move by the same percentages because they are tied to commercial rates, for example Business Standard from $3.00 to $3.50 and Business Premium unchanged at $5.50. The page does not mention education.
Pricing check: Microsoft US list vs Pax8 catalogue
We compared Microsoft’s new US list prices with Pax8’s catalogue suggested retail prices. Pax8 shows no currency label; the figures are consistently about 1.36 times the US list across all five plans, which is consistent with a Canadian dollar conversion, but treat the currency as unconfirmed. Prices are per user per month, before tax, and are not a quote.
| Plan | Microsoft US list (new) | Pax8, 1-year term billed annually (per month) | Pax8, 1-year term billed monthly | Pax8, month-to-month |
|---|---|---|---|---|
| Business Basic | $7.00 | $9.50 | $9.98 | $11.40 |
| Business Standard | $14.00 | $19.00 | $19.95 | $22.80 |
| Business Premium | $22.00 | $29.80 | $31.29 | $35.76 |
| Microsoft 365 E3 | $39.00 | $52.90 | $55.55 | $63.48 |
| Microsoft 365 E5 | $60.00 | $81.40 | $85.47 | $97.68 |
Two practical points. First, flexibility has a price: billing a 1-year term monthly costs about 5% more than paying annually, and month-to-month costs about 20% more. Second, do not budget Canadian purchases from US list prices. Also confirm the exact SKU, since plans with and without Teams are priced differently.
What to do at renewal
- Map your renewal dates. Anything renewing from now on is exposed to the new prices.
- Check your SKU mix. No-Teams plans and frontline plans saw some of the largest percentage increases.
- Value the add-ins. If Defender for Office Plan 1 or Intune Plan 2 replaces something you pay for elsewhere, count it. If not, do not count it.
- Compare term options. Annual billing on a 1-year term is the cheapest of the options above.
- Use the Message Center. It gives at least 30 days’ notice before packaging changes land in your tenant, so review new Copilot Chat behaviour before users see it.
Where to be skeptical
Microsoft presents the increases alongside added features, but the added features are not equally valuable to everyone. Business Premium, the plan many small organisations use for security, stayed flat, while its neighbours rose. Percentages also hide the larger dollar effect on big seat counts: a $3 increase on 1,000 E3 users is $36,000 a year.
