Microsoft raised Microsoft 365 business prices on July 1, 2026. Business Basic went from $6 to $7 per user each month, Business Standard from $12.50 to $14, and Business Premium held at $22. Microsoft folded expanded Copilot Chat and an extra 50 GB of mailbox storage into the plans at the same time. Here's what you're actually paying now, why it went up, and where to trim the bill.
What changed on July 1, 2026
The increase hit the two plans most small businesses live on. Microsoft's new price list moved monthly per-user pricing like this, as broken down independently by TrustedTech and Office Watch:
- Business Basic: $6 to $7 (a 16% jump)
- Business Standard: $12.50 to $14 (12%)
- Business Premium: $22, unchanged
On a 25-person team, Business Standard now runs $4,200 a year instead of $3,750. Not catastrophic. But it's the kind of quiet line-item creep that never reverses, so it's worth understanding before your renewal lands.
The rollout started July 1 and finished across billing systems by August 1, 2026. If your renewal date is later in the year, you may not have felt it yet.
Why did Microsoft raise the price?
AI. Microsoft is spreading the cost of its enormous AI buildout across the whole business customer base, and it's doing that by bundling AI features into the base plans instead of selling them separately. Business Basic and Standard now include more Copilot Chat and 50 GB of extra mailbox storage. You didn't ask for it, but you're paying for it.
What do you get for the extra money?
Copilot Chat inside the apps you already use, plus the storage bump. Copilot Chat is the assistant tier included in your plan — it works over web data and, with the right setup, some of your own content. It is not the full Microsoft 365 Copilot, the paid add-on that reaches into your email, files, and Teams and bills separately on top of your plan.
So the value depends entirely on whether your team uses Copilot Chat. If they do, the increase buys something real. If they don't, you're paying more for a feature nobody opens. We wrote a fuller take on whether the paid Copilot earns its keep in our Copilot cost breakdown.
Should you switch plans or absorb it?
Look at Business Premium first. It didn't move — it's still $22 — which quietly makes it the best value in the lineup right now. Premium bundles Business Standard's apps with real security: Defender for Business, Intune device management, conditional access, and data loss prevention. That's the security stack most small businesses need and buy piecemeal anyway.
Run the math. If you're on Standard at $14 and separately paying for endpoint protection and MDM, Premium at $22 often costs less than the sum of the parts — and it consolidates the bill and the management. We break the two plans down side by side in Business Premium vs. Standard.
How to keep the Microsoft 365 bill down
Three moves cover most of it.
Right-size your licenses. Most companies pay for accounts that left months ago or for Standard where a frontline worker only needs Basic. A license audit almost always finds money. Do it at renewal.
Commit annually. Annual commitment pricing beats month-to-month. If your headcount is stable, lock it in.
Consolidate, don't stack. If you're buying M365 plus a separate antivirus, a separate MDM, and a separate backup tool, price out Business Premium against that pile. Fewer vendors, one login, usually less money.
None of this requires a new contract or a migration. It's an afternoon of license cleanup and one honest look at what you actually use. That's the kind of review that lives inside a managed Microsoft 365 agreement — someone watching the licensing so the bill doesn't drift.
Written by Latoya Reed, who leads cloud and Microsoft 365 services at The NetSys Group. NetSys has delivered managed IT, cybersecurity, and cloud services since 1998, serving businesses across NY, NJ, CT, PA, and Southwest Florida.
Frequently asked questions
How much did Microsoft 365 go up in 2026?
Business Basic rose from $6 to $7 per user per month, and Business Standard from $12.50 to $14, effective July 1, 2026. Business Premium stayed at $22. The changes rolled out through August 1, 2026, and apply as your subscription renews.
Is Copilot now included in Microsoft 365 Business plans?
Copilot Chat, the assistant tier, is now bundled into Business Basic and Standard along with 50 GB more mailbox storage. The full Microsoft 365 Copilot — the one that reads your email, files, and Teams — is still a separate paid add-on billed on top of your plan.
Can I avoid the price increase?
You can't opt out of list pricing, but you can lower the bill: audit licenses and drop unused accounts, right-size users onto the cheapest plan that fits, and commit annually instead of monthly. Many businesses cut more than the increase added.
Is Business Premium worth it now?
For most small businesses, yes. Premium held at $22 while Standard rose to $14, and it adds Defender, Intune, and conditional access. If you're buying security tools separately on top of Standard, Premium usually costs less and consolidates everything under one license.
Want a second set of eyes on your Microsoft 365 licensing before your renewal? Book a complimentary review and we'll show you exactly where the bill can come down.
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