Microsoft has announced new commercial Microsoft 365 pricing and licensing changes that take effect on July 1, 2026. While existing customers will keep their current pricing until renewal, now is the time to understand how these changes could affect your business.
The bigger question isn't simply whether prices are increasing. It's whether the new features like expanded mailbox storage, enhanced phishing protection, Copilot Chat improvements, Microsoft Defender, and Intune capabilities provide enough value to offset the additional cost or replace tools you're already paying for.
This guide breaks down what's changing, who's affected, and the key questions to ask before your next Microsoft 365 renewal.
Executive Summary
Business Basic and Business Standard increase, but Microsoft is also adding 100 GB mailbox storage, URL time-of-click protection, and Copilot Chat improvements.
Business Premium remains listed at $22 while still gaining 100 GB mailbox storage and Copilot Chat improvements.
E3 and E5 plans gain security, Intune, and Copilot-related capabilities that may offset some add-on spend.
Unused licenses will cost more after renewal. Seat cleanup is the fastest first move.
Microsoft says the new pricing applies to both annual and monthly billing plans at the next renewal after July 1, 2026.
Microsoft says the Defender and Intune additions are expected to be complete by August 1, 2026. Confirm tenant availability before retiring related add-ons.
Interactive calculator
Estimate your annual-commit Microsoft 365 change
Enter your current seat count by plan. This uses Microsoft published U.S. list prices shown per user/month and annualizes the difference over 12 months for an annual-commitment estimate.
Monthly-billed subscriptions are also affected at renewal, but billing-term pricing can vary. Use this calculator as a planning estimate and review your actual agreement before renewal.
Microsoft 365 Business Basic
Business • Mailbox, phishing protection, and Copilot Chat improvements
- 100 GB mailbox storage
- URL time-of-click protection
- Copilot Chat enhancements and analytics
Microsoft 365 Business Standard
Business • Mailbox, phishing protection, and Copilot Chat improvements
- 100 GB mailbox storage
- URL time-of-click protection
- Copilot Chat enhancements and analytics
Microsoft 365 Business Premium
Business • No list-price increase announced
- 100 GB mailbox storage
- Copilot Chat enhancements and analytics
Microsoft 365 Apps for Business
Standalone • Desktop Office apps only
Office 365 E1
Enterprise • No list-price increase announced
- URL time-of-click protection
- Copilot Chat enhancements and analytics
Office 365 E3
Enterprise • Adds Defender for Office 365 Plan 1
- Microsoft Defender for Office 365 Plan 1
- Copilot Chat enhancements and analytics
Office 365 E5
Enterprise • Security and compliance suite increase
- Copilot Chat enhancements and analytics
Microsoft 365 E3
Enterprise • Adds Defender for Office 365 Plan 1 and Intune capabilities
- Microsoft Defender for Office 365 Plan 1
- Intune Remote Help
- Intune Advanced Analytics
- Intune Plan 2
- Copilot Chat enhancements and analytics
Microsoft 365 E5
Enterprise • Adds Security Copilot and advanced Intune capabilities
- Microsoft Security Copilot
- Intune Endpoint Privilege Management
- Microsoft Cloud PKI
- Intune Enterprise Application Management
Microsoft 365 F1
Frontline • Largest percentage impact for frontline workforces
- Copilot Chat enhancements and analytics
Microsoft 365 F3
Frontline • Common for shift workers who need Teams and apps
- Copilot Chat enhancements and analytics
Estimated Impact
Estimate only. The calculator annualizes the monthly list-price difference for annual-commit planning. Plans with no list-price increase still update seat and monthly cost totals, but do not add to the estimated annual increase. Microsoft says impacted annual and monthly billing plans move to the new pricing at renewal. Final pricing can vary by agreement type, billing term, promotions, taxes, currency, nonprofit or government status, and partner pricing.
What changes
Price increases are only part of the story
Microsoft is also adding capabilities to several plans. The value depends on whether your organization will use those features or can retire overlapping add-ons.
Business plans
Business Basic and Standard increase. Business Premium remains flat.
Basic, Standard, and Premium are expected to move to 100 GB mailbox storage during the packaging rollout. Basic and Standard also gain URL time-of-click protection, which helps inspect links when users actually click them.
All three Business plans receive Copilot Chat enhancements and analytics.
Enterprise plans
Office 365 E3, E5, Microsoft 365 E3, and Microsoft 365 E5 increase.
Office 365 E3 and Microsoft 365 E3 receive Defender for Office 365 Plan 1, which may replace a separate anti-phishing add-on for some customers.
Microsoft says the Defender and Intune additions are expected to be complete by August 1, 2026. Microsoft 365 E3 gains Intune Remote Help, Advanced Analytics, and Plan 2 capabilities. Microsoft 365 E5 adds Security Copilot and additional advanced Intune features.
Frontline plans
F1 and F3 have the largest percentage increases in the common commercial tables.
Both plans receive Copilot Chat enhancements and analytics. Organizations with shift workers should still review whether each role needs F1, F3, Business, or a shared-device workflow.
NTS recommendation
Do this before your next renewal
The organizations that handle this well will not wait for the invoice. They will review users, add-ons, and renewal timing before the new pricing hits their agreement.
Audit active seats before renewal
Remove former employees, seasonal seats, service accounts with full licenses, and users who have not signed in recently.
Model renewal timing
If your Microsoft term renews before July 1, 2026, renewing at the current rate may defer the increase for the new term.
Map bundled security value
E3 and E5 additions may replace separately purchased Defender, Intune, or endpoint management add-ons.
Right-size by employee role
Compare Business Standard, Business Premium, E3, E5, F1, and F3 against what each role actually needs.
Decision guide
Questions to ask before changing plans
Are we paying for inactive users?
Start with sign-in activity and license assignment reports. A small cleanup can offset a large percentage of the increase.
Are we buying add-ons that become bundled?
Defender for Office 365 Plan 1 and Intune additions may change the value of E3 and E5 for some customers.
Should Business Standard users move to Premium?
The price gap narrows after July 1. Organizations that need endpoint management, conditional access, and stronger security should model Premium.
Can we renew before July 1?
Microsoft states existing customers remain on current pricing until renewal. Renewal timing is now a budget lever.
Common July 2026 list-price changes
FAQ
Microsoft 365 price increase questions
Need a Microsoft 365 license review before renewal?
Network Thinking Solutions can review current seats, add-ons, renewal dates, and plan fit, then give your team a practical recommendation before the July 2026 pricing change reaches your invoice.
Source: Microsoft Licensing Resources, “Microsoft 365 Pricing and Packaging Updates,” published February 16, 2026. Prices shown are U.S. list prices as published by Microsoft and are subject to change.