Microsoft 365 licence prices rise on 1 July 2026: which plans increase and three decision points

From 1 July 2026, Microsoft is raising prices on virtually all commercial Microsoft 365 subscriptions worldwide. It is the first significant price adjustment in several years and affects virtually every organisation working with Business, Enterprise, or Frontline plans. The increases range from approximately five per cent for Enterprise subscriptions to more than thirty per cent for Frontline plans. For IT decision-makers and directors who need to set their licence strategy now, this is the moment to understand what changes, what is offered in return, and which options are available.

The announcement is part of a broader rebundling in which Microsoft is also adding extra features to existing plans. That makes the consideration more complex than a straightforward price increase. This article sets out the facts and identifies three concrete decision points for the coming weeks.

Which plans go up and which do not?

Business Basic rises from $6 to $7 per user per month, an increase of nearly 17 per cent. Business Standard moves from $12.50 to $14, an increase of 12 per cent. Microsoft 365 Business Premium remains unchanged. That is a deliberate choice by Microsoft: this plan has already been significantly expanded with additional security features over the past two years and is evidently considered fully priced.

In the Enterprise segment, Office 365 E3 rises from $23 to $26 per user per month, an increase of 13 per cent. Microsoft 365 E3 moves from $36 to $39, an increase of just over 8 per cent. Microsoft 365 E5 rises from $57 to $60, an increase of just over 5 per cent. Office 365 E1, like Business Premium, escapes a price increase.

The steepest percentage increases are concentrated in the Frontline plans. Microsoft 365 F1, designed for employees without a fixed workstation, rises by approximately 33 per cent. Microsoft 365 F3 increases by 25 per cent. This affects organisations with large groups of retail employees, production workers, or healthcare staff covered under Frontline plans. For an organisation of a hundred frontline users on F3, this represents a structurally higher annual invoice that can quickly run to thousands of euros.

What do users get in return?

The price increase is accompanied by bundle expansions. For Business Basic and Business Standard, mailbox storage is extended by 50 gigabytes, significantly growing the total storage quota. Additionally, URL time-of-click protection and Copilot Chat are added as standard to these plans. URL time-of-click protection checks links at the moment of clicking, not only at delivery of the email, reducing the risk of phishing via delayed malware — an attack technique that regular spam filters miss.

For Enterprise plans, the rebundling includes expansions in Microsoft Defender, Intune, and Copilot Chat. Many of these expansions are being rolled out in phases between June and August 2026. IT administrators receive thirty days' advance notice in the Microsoft 365 Message Centre before new features become available in their tenant. It is advisable to actively monitor those notifications so you know when to activate new functionality and communicate it to users.

Not every addition is immediately valuable for every organisation. Copilot Chat adds value when employees actively use AI features, but contributes little if usage is not guided. URL protection is immediately relevant for most organisations. The extra storage is a tangible benefit for organisations with extensive email archives.

The European context: what does this mean for Dutch organisations?

Microsoft publishes its prices primarily in US dollars. The final euro prices for the Dutch market are being set in June 2026 and communicated via Microsoft partner channels. Relevant here is that Microsoft applied a foreign exchange correction in February 2026 that adjusted euro prices downward by approximately 7.4 per cent. The net impact for European customers, measured in euros, therefore falls lower than the dollar percentages suggest. Organisations whose current contract was signed before that exchange rate correction may see a combined effect.

Organisations working via a Microsoft partner or reseller, such as a Microsoft Cloud Solution Provider, will see the new prices at their next renewal after 1 July 2026. Contracts currently running will not change until the end of the current term. This gives organisations with a recently renewed contract a buffer of sometimes several months. Check your contract date: that is the starting point for any strategic decision.

Three decision points for IT decision-makers

The first decision point is early renewal. If your contract expires before 1 July 2026, or if you have the option to renew earlier, you can lock in current prices for the duration of the new contract. This is worthwhile if the cost saving is greater than the value of the additional bundled features you would be deferring. For organisations on Business Basic where the price rises by 17 per cent but the extra features are directly relevant, the consideration differs from a Frontline organisation that benefits little from Copilot Chat or extra mailbox storage.

The second decision point is licence optimisation. A price increase is an excellent moment to check whether all users have the right plan. Employees who only use email and SharePoint may not need a Business Standard licence and could move to Business Basic, even at the higher price. At the same time, Business Premium, which is not rising in price, may offer better value for certain user groups because of its built-in advanced security. Conducting a detailed inventory now yields structural savings.

The third decision point is evaluating overlap with existing standalone licences. The new features in the bundles may make current separate products redundant. Does your organisation currently pay separately for a URL filter, extra mailbox storage, an external chatbot, or a security tool that will soon be included in the plan? If so, the actual cost increase changes considerably. Add the licence costs that can be dropped to your existing price, then compare that sum with the new bundle price. In many cases the net difference is smaller than the headline percentage suggests.

What can you do this month?

Four actions for IT teams in June 2026. First: check the expiry date of your current Microsoft 365 subscription. If you work via a partner, explicitly ask when your contract expires and what renewal under current terms costs. Second: export your current licence assignments and compare them with actual usage. The Microsoft 365 admin centre shows per user which licences are assigned and when features were last used. Unused licences are direct savings opportunities.

Third: monitor Message Centre notifications in your tenant. Microsoft will announce specific roll-out dates for the new bundled features in the coming weeks. This lets you know when extra storage and URL protection actually become available to your users and gives you time to prepare communications. Fourth: have total licence costs calculated with and without early renewal, taking into account the number of users per plan type and the final euro prices to be published in June.

Microsoft 365 licence management has become more complex over the past years, not simpler. A pricing change at this moment is a reason to restore clarity and make deliberate choices rather than renewing on autopilot. Want your licence situation audited, the impact of the price increase mapped for your organisation, or advice on early renewal? Contact Zarioh for an obligation-free conversation.