Microsoft 365 Price Increases from July 2026 — What's Changing and What You're Getting
Microsoft has announced pricing updates across most Microsoft 365 commercial plans, effective 1 July 2026.
Common plans that are increasing
The plans most commonly used by our clients — Microsoft 365 Business Basic, Business Standard, Business Premium and Office 365 E3 — are all subject to increases. Depending on your plan, the change ranges from approximately 5% to 17%.
Notably the most fully featured package for small business, Microsoft 365 Business Premium, is not going up in price making it an even more compelling license. This is our recommended license type for most clients as it includes enhanced productivity and security elements.
Increased features
Microsoft has tied these increases to a meaningful set of new capabilities being added to the base plans:
- Additional mailbox storage — Business Basic, Standard and Premium subscribers will receive an extra 50GB of mailbox storage per user.
- Enhanced Copilot Chat — All affected plans are gaining significant improvements to the built-in Copilot Chat experience, including inbox and calendar awareness, plus access to Word, Excel, and PowerPoint agents. These allow you to work iteratively with Copilot to create and refine documents, spreadsheets, and presentations directly within your existing apps.
- Microsoft Defender for Office 365 (MDO) Plan 1 for Office 365 E3 — E3 subscribers will gain Defender for Office 365 Plan 1 as part of their base plan, adding link and attachment protection, anti-phishing policies, and time-of-click URL checking.
New capabilities will begin rolling out from June 2026, with full availability by 1 August 2026. Tenants will receive advance notice through the Microsoft 365 Message Centre before changes become active.
Copilot
It's worth noting that Copilot Chat with Enterprise Data Protection — which ensures your conversations are not used to train AI models and that your data stays within Microsoft's compliance boundary — was added to all these plans a couple of years ago at no extra cost. That was a meaningful addition that flew under the radar for many users.
More Details
New capabilities will begin rolling out from June 2026, with full availability by 1 August 2026. Tenants will receive advance notice through the Microsoft 365 Message Centre before changes become active.
For the full details, you can read the official Microsoft announcement here:
Advancing Microsoft 365: New capabilities and pricing update
To see a chart of the price increase that shows the increases as a percentage, take a look here:
Microsoft 365 Pricing and Packaging Updates | Microsoft Licensing Resources
Please note that the pricing shown at these Microsoft sites are in USD and don't directly relate to the AUD pricing, however the percentage changes will be applied to the AUD price.
If you have questions about how these changes affect your subscription or renewal timing, please don't hesitate to reach out to the Premier Network Services team.