Microsoft to raise Microsoft 365 business prices by up to 33% from July 2026

Microsoft will increase the list prices for its Microsoft 365 suites for commercial and government customers worldwide, effective July 1, 2026.

The price update applies to most business and public sector plans, with the biggest increases affecting the small-business and frontline-worker tiers.

Business subscriptions will see mid-teens increases. Microsoft 365 Business Basic will rise 16.7%, to $7 per user per month, while Business Standard will climb 12%, to $14. Enterprise suite price increases are more modest, with Microsoft 365 E3 increasing 8.3%, to $39 per user per month, and E5 up 5.3%, to $60. Government suites will follow a similar pattern, phased in according to local regulations.

Frontline-worker plans face the steepest changes. Microsoft 365 F1 will go from $2.25 to $3 per month (up 33%), and F3 from $8 to $10 (up 25%). Microsoft said the new pricing reflects more than 1,100 features added to Microsoft 365 in recent years, including AI-driven productivity tools, security enhancements and management capabilities.

The move sets a new baseline for productivity suite budgets and competitive benchmarking against Google Workspace. Copilot for Microsoft 365 remains a separate add-on service of $30 per user per month, and Microsoft has introduced new bundles for small and midsize businesses, which may soften the impact for some customers but raise overall AI tooling costs.