Microsoft 365 price hike 2026: what midmarket should review now

On July 1, 2026, Microsoft raised Microsoft 365 prices. For many midmarket businesses, this increase coincides with H2 budget planning, raising an uncomfortable question: do we pay more for the same licenses, or do we get something for it? This article explains the Microsoft 365 price increase of 2026 and shows what to review in your licenses now.

The short answer: what changes in Microsoft 365 pricing 2026?

On July 1, 2026, list prices for most commercial Microsoft 365 plans rose, per Microsoft's official announcement, roughly 5 to 16 percent by plan. Microsoft 365 Business Standard climbs from 12.50 to 14.00 USD per user per month (plus 12 percent), Business Basic from 6.00 to 7.00 USD (plus 16 percent), Business Premium stays at 22.00 USD. At the same time, Microsoft is embedding free Copilot Chat deeper into Office apps. Existing contracts continue at old prices until the next renewal.

Important context: these are Microsoft's published list prices in USD. Euro prices can vary by country, contract channel, and partner and are finalized only shortly before the deadline. So check your actual euro rate on your own invoice, not the dollar list.

Which plans see price increases in the Microsoft 365 hike

Commercial suites for Business and Enterprise are affected. Microsoft's published changes (list prices in USD per user per month):

• Microsoft 365 Business Basic: 6.00 to 7.00 USD (plus 16 percent)
• Microsoft 365 Business Standard: 12.50 to 14.00 USD (plus 12 percent)
• Microsoft 365 Business Premium: unchanged at 22.00 USD
• Microsoft 365 E3: 36 to 39 USD (plus 8 percent), Microsoft 365 E5: 57 to 60 USD (plus 5 percent)
• Office 365 E3: 23 to 26 USD (plus 13 percent), Office 365 E5: 38 to 41 USD (plus 8 percent)

Per Microsoft, standalone Copilot and Teams licenses are not part of this round. For existing customers: the new price takes effect only at the next renewal, not mid-contract. The new features, however, start rolling out in June 2026, with 30 days notice in your tenant's Message Center.

What you get for the increase: Copilot Chat in Office apps

Microsoft justifies the increase with new AI, security, and device management features. The most visible piece is Copilot Chat, now built directly into Word, Excel, PowerPoint, Outlook, and OneNote and able to access mailbox and calendar context. Business plans get an extra 50 GB postbox storage, Basic and Standard get link-protect in Outlook. Enterprise plans like Microsoft 365 E3 now bundle Microsoft Defender for Office Plan 1 and multiple Intune features that were previously separate costs.

A critical distinction often gets blurred in practice: Copilot Chat is the free, included-in-eligible Microsoft 365 plans chat function. The full Microsoft 365 Copilot, which generates content in Word, Excel, and PowerPoint and runs custom agents, remains a paid add-on at roughly 30 USD per user per month. We've described in detail what this full Copilot delivers daily in our article Microsoft Copilot: value for midmarket.

License rights check: are you paying for what you actually use?

A price increase is the best occasion to audit your license inventory honestly. In many businesses, licenses run unused, or users sit on costlier plans than needed. Three review points almost always pay off:

• Karteileichen: are there assigned licenses for departed staff or test accounts? Each one costs more from July onward.
• Plan tier: does everyone really need Business Standard, or is a cheaper Frontline or Basic license enough for staff without fixed workstations?
• Double functions: are you paying separately for tools now included in your plan from July, like link protection or parts of Intune?

This isn't legal license advice, but it shows where the lever is. Who doesn't just accept the increase but instead cuts unused licenses usually comes out cheaper in the end than before.

Is Copilot automation worth the premium?

The higher base price brings Copilot Chat; real automation value usually comes only from the full Copilot or targeted process automation around it. The rule of thumb: the premium makes sense where it replaces repetitive manual work, not where it's just a faster search bar. A sales team drafting offers and emails daily recovers Copilot faster than a department opening it twice a month.

Whether Copilot makes sense for your roles is best decided on actual tasks, not a feature list. We look at a Copilot rollout at which work actually drains time in your business and automate the processes around Microsoft 365 where it measurably lightens the load. What that looks like beyond Copilot is on our page for Microsoft 365 automation.

What midmarket should do now

For H2 2026 budgeting, three steps make sense. First: calculate the increase for your license mix on euro basis and set the amount aside. Second: use the deadline for a rights check and clean out unused licenses. Third: decide on the full Copilot role by role with a small pilot. So you pay the premium only where it returns value and keep control over your budget.

Common questions

When does the Microsoft 365 price increase take effect?

New prices are effective July 1, 2026. New features roll out starting June 2026, with 30 days notice in Message Center. Existing contracts stay at the old price until the next renewal.

By how much do Microsoft 365 prices increase in 2026?

Roughly 5 to 16 percent by plan. Business Standard goes from 12.50 to 14.00 USD (plus 12 percent), Business Basic from 6.00 to 7.00 USD (plus 16 percent), Business Premium stays unchanged. These are list prices in USD; euro price may differ and is finalized shortly before the deadline.

Is Copilot now free in Microsoft 365?

Copilot Chat is included in most Microsoft 365 plans from July 2026 onward and will be built deeper into Office apps. Full Microsoft 365 Copilot, which creates content and runs agents, remains a paid add-on at roughly 30 USD per user per month and is not part of this price round.

Do I have to pay more immediately as an existing customer?

No. The new price takes effect only at your next subscription renewal, not mid-contract. New features, however, come to your tenant independently, announced via Message Center.

Should I switch plans because of the increase?

Sometimes. It's worth reviewing your license inventory: drop unused licenses, shift staff without fixed workstations to cheaper plans, and remove tools separately paid for that are now included in your plan. A blanket plan switch without this analysis rarely saves money.