Microsoft 365 pricing in 2026 ranges from free (web-only apps for students) to $60 per user per month for the enterprise E5 suite. On July 1, 2026, Microsoft is raising commercial plan prices across Business, Enterprise, and Frontline tiers by 5% to 43%. After the increase: Business Basic is $7/user/month, Business Standard is $14/user/month, Business Premium stays at $22/user/month (no change), E3 rises to $39/user/month, and E5 reaches $60/user/month. For consumers, Microsoft 365 Personal is $6.99/month and Family is $9.99/month (up to 6 users). All plans now include enhanced Copilot AI features, stronger security with Microsoft Defender, and expanded Intune device management. A one-month free trial is available for most plans.

Microsoft 365 Pricing 2026: Every Plan, Cost & Features Compared

Whether you are a solo professional, a small business owner, or an IT manager at a Fortune 500 company, Microsoft 365 touches your daily work. But with multiple tiers, mid-year price increases, hidden add-ons, and an alphabet soup of SKUs, choosing the right plan — and knowing exactly what you will pay — is surprisingly difficult.

This guide cuts through the noise. Below you will find every current and post-July 2026 price, a full comparison table, honest pros and cons, and a clear verdict on whether Microsoft 365 is actually worth the money in 2026.

What Is Microsoft 365?

Microsoft 365 (formerly Office 365) is Microsoft’s cloud-based subscription platform that bundles the Office app suite — Word, Excel, PowerPoint, Outlook, OneNote — with cloud services like OneDrive, Microsoft Teams, SharePoint, and increasingly, AI tools powered by Copilot. Unlike the old one-time Office purchase, a Microsoft 365 subscription delivers continuous updates, cloud storage, and cross-device access.

As of 2026, Microsoft 365 is available across four main segments: Consumer (Personal and Family), Business (up to 300 users), Enterprise (unlimited users), and Frontline (field/shift workers).

Microsoft 365 Pricing 2026: The Big Picture

On December 4, 2025, Microsoft announced a significant global pricing and packaging update effective July 1, 2026. This is only the second major commercial pricing change in over 15 years. Increases range from 5% for the top-tier E5 plan up to 43% for the Frontline F1 without Teams. Crucially, Business Premium and Office 365 E1 are not changing in price.

Note: Consumer plans (Personal, Family) are currently unchanged in this update. The increases primarily affect commercial Business, Enterprise, and Frontline SKUs.

Full Microsoft 365 Pricing Comparison Table (2026)

All commercial prices shown are annual commitment, per user per month in USD. Monthly billing adds approximately 20% to the per-month rate.

Plan	Price (Pre-Jul 2026)	Price (Post-Jul 2026)	Users	Apps Included	Storage
Microsoft 365 Personal	$6.99/mo	$6.99/mo*	1 user	Word, Excel, PPT, Outlook, OneNote + Copilot	1 TB OneDrive
Microsoft 365 Family	$9.99/mo	$9.99/mo*	Up to 6	Same as Personal	6 TB total (1 TB each)
M365 Business Basic	$6.00/user/mo	$7.00/user/mo	Up to 300	Web/mobile apps only, Teams, Exchange	1 TB OneDrive
M365 Business Standard	$12.50/user/mo	$14.00/user/mo	Up to 300	Full desktop apps, Teams, Bookings	1 TB OneDrive
M365 Business Premium	$22.00/user/mo	$22.00/user/mo	Up to 300	All Standard + Intune, Defender, Azure AD P1	1 TB OneDrive
Office 365 E1	$10.00/user/mo	$10.00/user/mo	Unlimited	Web/mobile apps, Teams, SharePoint	1 TB OneDrive
Office 365 E3	$23.00/user/mo	$26.00/user/mo	Unlimited	Full desktop apps + compliance tools	Unlimited
M365 E3	$36.00/user/mo	$39.00/user/mo	Unlimited	O365 E3 + Windows 11 Enterprise + EMS E3	Unlimited
M365 E5	$57.00/user/mo	$60.00/user/mo	Unlimited	E3 + Defender, Security Copilot, Intune Suite	Unlimited
M365 Frontline F1	$2.25/user/mo	$3.00/user/mo	Unlimited	Web apps, Teams (no mailbox)	2 GB Exchange
M365 Frontline F3	$8.00/user/mo	$10.00/user/mo	Unlimited	Web/mobile Office + Teams + SharePoint	2 GB Exchange

* Consumer plan pricing (Personal/Family) is unchanged in the July 2026 update. Commercial prices shown reflect post-July 1, 2026 list rates.

Plan-by-Plan Breakdown: Features, Pros & Cons

Microsoft 365 Personal — $6.99/month

Best for individual users who need the full Office desktop suite on up to 5 devices. Includes 1 TB OneDrive storage, Copilot AI integration in Word and Excel, and Microsoft Defender security.

Pros:

• Affordable entry point for full desktop Office apps
• 1 TB cloud storage covers most personal needs
• Cross-platform: Windows, Mac, iOS, Android
• Copilot AI integration included

Cons:

• Limited to one user only
• No business email, custom domain, or admin controls
• Copilot AI usage is credit-limited, not unlimited

Microsoft 365 Family — $9.99/month

Everything in Personal, shared across up to 6 people, each with 1 TB OneDrive storage (6 TB total). An exceptional value for households.

Pros:

• Up to 6 users at roughly $1.67 per person per month
• 6 TB total cloud storage
• Each member gets independent storage and account

Cons:

• Copilot AI access limited to plan owner (subscribers only), not shared members equally
• Still no business-grade email or admin controls

Microsoft 365 Business Basic — $7/user/month (post-July 2026)

The entry-level commercial plan. Provides web and mobile versions of Office apps, Teams, Exchange (custom email), and SharePoint — but no desktop application installs.

Pros:

• Cheapest way to get a professional custom email domain
• Includes Microsoft Teams with meeting recordings
• Good for light users who primarily work in a browser

Cons:

• No desktop Office apps — major limitation for power users
• 16.7% price increase from July 2026
• No advanced security tools or device management

Microsoft 365 Business Standard — $14/user/month (post-July 2026)

The most popular SMB plan. Adds full desktop Office installations and more collaboration tools on top of Business Basic. Ideal for most small and mid-sized teams.

Pros:

• Full desktop apps for Word, Excel, PowerPoint, Outlook
• Includes Microsoft Bookings for scheduling
• Webinar hosting and attendee registration features
• Copilot Chat enhancements coming June 2026

Cons:

• 12% price jump in July 2026
• No advanced endpoint management or Defender for Business
• Copilot Pro still requires a separate $30/user/month add-on

Microsoft 365 Business Premium — $22/user/month (unchanged)

The best-value commercial plan heading into 2026 — and its price is not increasing. Includes everything in Standard plus Microsoft Intune (device management), Microsoft Defender for Business (advanced threat protection), Azure AD P1, and Conditional Access policies.

Pros:

• No price increase in July 2026 — widest gap against Standard just narrowed
• Enterprise-grade security at SMB pricing
• Includes Intune and Defender for Business — previously separate add-ons
• Best total value for security-conscious businesses with 10-300 users

Cons:

• Still capped at 300 users — larger organizations need Enterprise plans
• No advanced compliance tools (eDiscovery, legal hold)

Office 365 E1 — $10/user/month (unchanged)

The enterprise entry tier. Web and mobile apps with full compliance and admin tools. Unlimited users and cloud storage.

Pros:

• Price is unchanged — no July 2026 increase
• Unlimited mailbox storage and OneDrive
• Full Teams, SharePoint, Yammer capabilities

Cons:

• No desktop app installs
• Limited security compared to E3/E5

Microsoft 365 E3 — $39/user/month (post-July 2026)

The core enterprise bundle that adds Windows 11 Enterprise licensing and Enterprise Mobility + Security (EMS) E3. Significant new inclusions from June 2026: Microsoft Defender for Office 365 Plan 1, Intune Plan 2, and Remote Help.

Pros:

• Windows 11 Enterprise included — simplifies device licensing
• New Defender for Office 365 Plan 1 adds phishing and malware protection
• Intune Plan 2 and Remote Help added at no extra cost
• Copilot Chat with inbox/calendar awareness coming in 2026

Cons:

• 8% price increase ($36 to $39/user/month)
• No Security Copilot, no advanced SIEM/SOAR (those require E5)

Microsoft 365 E5 — $60/user/month (post-July 2026)

The comprehensive enterprise tier. Everything in E3 plus Microsoft Defender for Endpoint P2, Microsoft Sentinel, Purview compliance tools, Security Copilot agents, and advanced analytics.

Pros:

• Security Copilot agents rolling out to all E5 customers in 2026
• Microsoft Cloud PKI and Intune Enterprise Application Management included
• Smallest percentage increase of any plan (+5.3%)
• Best option for regulated industries (financial, healthcare, government)

Cons:

• Most expensive commercial plan at $60/user/month
• Most SMBs and even many enterprises will not use all E5 features

Frontline F1 & F3 — $3 and $10/user/month (post-July 2026)

Designed for shift workers, retail associates, and field employees. F1 provides basic communication tools without a mailbox. F3 adds full web/mobile Office editing and a 2 GB mailbox. These plans saw the largest percentage increases (33-43%) but remain affordable in absolute terms.

Hidden Costs, Add-Ons & What Microsoft Does Not Advertise

The base plan price is rarely the total cost. Here is what catches organizations by surprise:

• Microsoft 365 Copilot (full AI): $30/user/month — not included in any base plan as of 2026
• Monthly vs. Annual billing: Choosing monthly billing adds approximately 20% to the listed price
• Microsoft Teams Phone (calling): $8-15/user/month extra depending on plan
• Power BI Pro: $10/user/month — not included below E5
• Advanced compliance tools (Purview): require E5 or add-ons
• Extra OneDrive storage: Consumer plans max at 1 TB; business plans can expand via SharePoint
• Domain registration: Business plans require a custom domain — typically $10-15/year from a registrar
• Microsoft 365 Backup: Additional cost for enhanced backup beyond standard retention

Free Trial & Discounts: How to Pay Less

• Free Trial: Most Business plans offer a 30-day free trial for new customers through Microsoft directly
• Nonprofit pricing: Nonprofits receive a 60-75% discount off commercial rates, adjusted in line with the July 2026 increases
• Education: Microsoft 365 A1 is free for verified students; A3 and A5 available at steep discounts
• Government: GCC and GCC High plans with phased pricing for increases above 10%
• Lock in pricing before July 1, 2026: Renewing an annual commitment before July 1 locks in current rates for the full new term
• Partner/CSP discounts: Purchasing through a Microsoft Cloud Solution Provider may yield better rates than direct
• Volume licensing: Enterprise Agreement customers may negotiate custom pricing

Best Alternatives to Microsoft 365 in 2026

Microsoft 365 dominates enterprise productivity, but it is not the only option. Here is how the leading alternatives compare:

Product	Starting Price	Best For	Key Difference vs M365
Google Workspace Business Starter	$7/user/mo	SMBs preferring cloud-first	No desktop Office apps; deep Google ecosystem integration; better real-time collaboration
Apple iWork (Pages, Numbers, Keynote)	Free	Apple-only users	No Windows/Android support; limited business features; no email or cloud admin tools
LibreOffice	Free	Budget-conscious desktop users	No cloud storage, no mobile apps, no AI, strong .docx compatibility but not identical
Zoho Workplace	$3/user/mo	Cost-sensitive SMBs	Solid email + office suite at lower price; smaller ecosystem; less enterprise security depth
Office 2024 (One-time)	$149.99 (Home & Student)	Anti-subscription users	Single device, no cloud, no Copilot, no ongoing updates — perpetual license only

Bottom line on alternatives: Google Workspace is the most credible enterprise competitor, especially for teams that prioritize real-time collaboration and a cloud-native workflow. Zoho Workplace wins on price for cost-sensitive SMBs. LibreOffice suits individuals who want zero licensing costs and do not need cloud services. None of these alternatives match Microsoft 365’s breadth of security tools, compliance features, or Windows integration.

Is Microsoft 365 Worth It in 2026?

For most businesses and many individuals, yes — but it depends on which plan you choose and whether you are actually using what you are paying for.

Where Microsoft 365 delivers clear value:

• Teams-based organizations where seamless Teams + Outlook + SharePoint integration is non-negotiable
• Security-conscious businesses: The July 2026 packaging additions — Defender for Office 365, Intune Plan 2, Security Copilot for E5 — deliver features that previously required separate, expensive subscriptions
• Regulated industries: Purview compliance, eDiscovery, and legal hold tools are industry-leading and deeply integrated
• Windows-heavy shops: E3 and E5 include Windows 11 Enterprise licensing, which alone justifies much of the cost

Where Microsoft 365 may not be worth it:

• Small teams that mostly need email and basic documents: Google Workspace Business Starter at $7/user/month covers most needs at lower cost
• Organizations where users are not using desktop apps: Business Basic at $7/user/month is the right size, not Standard or Premium
• Budget-strapped startups with under 5 users: Consumer Personal or Family plans may suffice, with Zoho for business email
• The 2026 price increase is real, but Microsoft has genuinely added value: bundling Defender, Intune, and Copilot Chat enhancements into existing tiers is not just price inflation — it eliminates add-on costs that many organizations were already paying separately.

The smartest move before July 1, 2026: audit your current licenses. Industry estimates suggest 30% or more of Microsoft 365 licenses are over-provisioned. Right-sizing your plan mix before the increase can offset the cost rise entirely.

Frequently Asked Questions (FAQ)

How much does Microsoft 365 cost in 2026?

For individuals, Microsoft 365 Personal is $6.99/month and Family is $9.99/month. For businesses, prices post-July 2026 range from $7/user/month (Business Basic) to $60/user/month (Enterprise E5). All commercial prices are for annual commitment; monthly billing adds approximately 20%.

When do the Microsoft 365 price increases take effect?

The new commercial prices take effect July 1, 2026 for new subscriptions and for existing customers at their next renewal after that date. Customers who renew before July 1, 2026 can lock in current pricing for the duration of their new term.

Which Microsoft 365 plans are NOT increasing in price?

Microsoft 365 Business Premium and Office 365 E1 are not changing in price. Consumer plans (Personal and Family) are also unaffected by the July 2026 commercial pricing update.

Does Microsoft 365 include AI / Copilot?

All plans now include Microsoft 365 Copilot Chat with enhancements (inbox and calendar awareness, Word/Excel/PowerPoint agents) as of mid-2026. However, the full Microsoft 365 Copilot experience — with advanced AI integration across all apps — still requires a separate add-on at $30/user/month.

Is there a free version of Microsoft 365?

Yes. Microsoft offers free web-based versions of Word, Excel, and PowerPoint through Office.com for anyone with a Microsoft account (ads may appear). Verified students at eligible institutions can access Microsoft 365 A1 for free. There is no free tier for business use beyond trial periods.

Can I try Microsoft 365 for free before buying?

Yes. Microsoft offers a 30-day free trial for most Business plans (Basic, Standard, Premium) for new customers. Enterprise trials are typically arranged through Microsoft or a certified partner.

What is the difference between Microsoft 365 and Office 2024?

Microsoft 365 is a subscription (monthly or annual) that delivers the latest Office apps, cloud storage, Teams, and AI features with continuous updates. Office 2024 is a one-time purchase for a single device with no cloud features, no Copilot integration, and no future version upgrades. Publisher ends in October 2026, making 365 increasingly the preferred choice.

What happens if I do not renew my Microsoft 365 subscription?

Your apps enter a read-only mode — you can view but not edit documents. OneDrive files remain accessible for 30 days after expiration before Microsoft begins archiving them. You will not lose your data immediately, but editing capability stops.

Does Microsoft 365 work offline?

The desktop app versions (available in Personal, Family, Business Standard, Premium, and Enterprise plans) work fully offline. Web and mobile-only plans (Business Basic, Office 365 E1, Frontline F1) require an internet connection for editing.