Microsoft is raising Microsoft 365 prices again in 2026. Here is what business customers need to know.

If it feels like Microsoft pricing has been a moving target lately, you are not imagining it. After changes that hit many organizations in April, Microsoft has now announced another round of list price increases for key Microsoft 365 and Office 365 commercial plans, scheduled to take effect July 1, 2026. 

This post explains what is changing, why Microsoft says it is happening, which plans are affected, and how to plan your next renewal cycle.

What Microsoft announced for 2026

Microsoft says it will increase global list prices for a set of Microsoft 365 and Office 365 suites, with the new pricing taking effect July 1, 2026. The company also noted the changes will apply globally, with local market adjustments, and that nonprofit pricing will be adjusted in line with commercial pricing. 

Reuters, citing the announcement, reports that the biggest increases land on small business and frontline worker plans, with smaller bumps for enterprise tiers. 

Reported examples of the July 2026 prices (USD)

Based on Reuters coverage of the announcement, the following monthly per-user prices were cited:

• Microsoft 365 Business Basic: from $6 to $7 (about +16.7%)
• Microsoft 365 Business Standard: from $12.50 to $14 (about +12%)
• Microsoft 365 F1: from $2.25 to $3 (up to +33%)
• Microsoft 365 F3: from $8 to $10 (about +25%)
• Microsoft 365 E3: $39 (about +8.3%)
• Microsoft 365 E5: $60 (about +5.3%) 

Important note: Microsoft’s blog post focuses on list price changes and value updates, while exact impacts can vary by contract type, region, and whether you buy through a partner or directly. 

How does this relate to the April increase you just went through

Many organizations saw pricing changes in April tied to billing mechanics and specific product updates. A widely discussed example is the 5% premium on monthly billing for annual commitments in the New Commerce Experience, which influenced how some customers experienced “a price increase” even when list prices for the underlying SKU did not change. (This is especially relevant for customers buying through partners.) 

The key difference is this: the 2026 announcement is framed as a list price change for suites themselves, not just a billing option adjustment. 

Why Microsoft says prices are rising

Microsoft’s stated justification is that the suites have grown in value, particularly across:

• Security capabilities
• AI features and Copilot-related innovation
• Management and IT controls

Microsoft says it delivered more than 1,100 new features across Microsoft 365, Security, Copilot, and SharePoint over the last year.

Coverage also points to Microsoft continuing to push Copilot as an add-on and expanding AI-driven experiences across the platform, alongside security enhancements.

Who is affected most?

From what has been reported so far:

• Small businesses’ and frontline workers’ plans may feel the largest percentage increases. 
• Enterprise plans still increase, but typically by smaller percentages. 
• Government suites are also included in the broader pricing update, with details varying by region and policy. 

If your organization has a large number of F1 or F3 licenses, even a small per-user change can quickly become a meaningful annual budget impact. This is where working with a partner like QIT Solutions can help you understand your true exposure before the increase hits.

What to do now: practical steps before July 2026

You have time, which is the good news. Here are smart moves to make the increase less painful.

1) Map renewals against July 1, 2026

Create a simple view of renewal dates by subscription type. The timing matters. If you renew before the effective date, your current pricing may hold through the term, depending on your agreement.

2) Right-size licenses before you renew.

Most environments have a percentage of users who are overlicensed. Common opportunities:

• Move light users from Standard to Basic
• Validate whether frontline workers truly need F3 versus F1
• Confirm who really needs E5 versus E3 plus targeted add-ons

A proper license audit, like the ones performed by QIT Solutions, often uncovers cost-saving changes without taking capabilities away from users.

3) Validate which security and AI features you actually use

Microsoft is tying the increase to new value across security and AI. Make sure your team has a clear answer to:

• Which controls are deployed today?
• What is planned for next quarter?
• Which are still unused and duplicative with third-party tools?

This helps you decide whether to lean in, consolidate tools, or renegotiate.

4) Recheck billing options

If April hit you because of billing mechanics, revisit whether annual prepay, annual with monthly billing, or a monthly term makes sense for cash flow versus total cost. April and July 2026 are separate events, but both can affect your total spend. 

Bottom line

Microsoft’s July 1, 2026, increase is a real list price shift for many Microsoft 365 and Office 365 business suites, following earlier pricing and billing changes that impacted customers in April. The biggest jumps appear aimed at small business and frontline plans, while enterprise tiers see smaller percentage increases. Even modest per-user changes can become a meaningful budget hit at scale.

The good news is you have time to plan. If you want a clear view of your renewal timing, cost exposure, and licensing options before the increase lands, QIT Solutions can help you right-size your Microsoft 365 environment, validate what you are actually using, and build a renewal strategy that reduces unnecessary spending.

Contact QIT Solutions to book a Microsoft 365 licensing and cost-optimization review ahead of your next renewal cycle.