When do the Microsoft 365 pricing updates take effect?

Microsoft says the commercial pricing updates take effect on July 1, 2026. Existing customers remain on current pricing until their next renewal after that date.

Are Microsoft Teams and Copilot standalone SKUs included in this pricing update?

No. The update applies to select Microsoft 365 suites and standalone components, but standalone Microsoft Teams and Copilot SKUs are not included in this pricing update.

What new capabilities are being added with the packaging update?

Depending on the plan, Microsoft is adding capabilities such as larger mailbox storage, URL time-of-click protection, Microsoft Defender for Office 365 Plan 1, Intune Remote Help, Intune Advanced Analytics, Intune Plan 2, Microsoft Security Copilot, Microsoft Cloud PKI, and Copilot Chat enhancements with analytics.

Why does this matter for Microsoft 365 renewals?

The July 2026 changes are more than a price increase. They also change bundled value, security coverage, management capabilities, and the total cost of ownership. Businesses should review their current plan, add-ons, and renewal timing before their next renewal cycle.

Microsoft 365 Pricing and Packaging Updates for July 2026

Q: When do the packaging updates begin rolling out?

Packaging updates begin rolling out in June 2026, and Microsoft says customers will receive at least 30 days notice in Message Center before the changes become available in their tenant.

Q: Which Microsoft 365 plans are affected by the July 2026 changes?

The updates affect Microsoft 365 Business, Enterprise, Frontline, Government equivalents, and selected standalone components such as Entra, EMS, Windows, and Microsoft 365 Apps.

Tags:

M365

Microsoft 365 Licensing Update

Microsoft 365 Pricing and Packaging Updates for July 2026

Microsoft is making broad pricing and packaging changes across Microsoft 365 Business, Enterprise, Frontline, Government equivalents, and selected standalone products. Existing customers stay on current pricing until renewal, while feature additions begin rolling out from June 2026.

Pricing change date

July 1, 2026

New commercial pricing becomes effective for new purchases and renewing subscriptions.

Packaging rollout

June 2026

Feature additions start rolling out before pricing changes fully take effect.

Existing customers

Renewal-based

Customers remain on current pricing until their next renewal after July 1, 2026.

Notice period

30 days

Microsoft says customers will receive at least 30 days' notice in Message Center before packaging changes hit their tenant.

What this means

This is not just a price increase.
It is a licensing strategy shift.

Microsoft is increasing prices across many suites, while also expanding bundled capabilities in security, management, device control, Copilot Chat, and core productivity. For some companies, this will improve value. For others, it creates a good moment to re-evaluate whether the current Microsoft 365 setup is still the right fit for cost, security, and AI readiness.

Budget impact

Renewing customers may see materially higher annual spend, especially across Business Basic, Frontline, Apps, and Entra add-ons.

Packaging impact

Some plans now include more security and management features, which may reduce the need for separate add-ons.

Timing impact

Renewal timing matters more now. Companies should check whether to lock in current structure before the updated pricing applies.

Commercial pricing changes at a glance

USD list pricing shown below. Country pricing and local currency may differ.

Enterprise suites

With Teams

Office 365 E1: unchanged at $10.00

Office 365 E3: $23.00 → $26.00 (+13%)

Office 365 E5: $38.00 → $41.00 (+8%)

Microsoft 365 E3: $36.00 → $39.00 (+8%)

Microsoft 365 E5: $57.00 → $60.00 (+5%)

Without Teams

Office 365 E1 (no Teams): unchanged at $6.79

Office 365 E3 (no Teams): $14.45 → $17.45 (+14%)

Office 365 E5 (no Teams): $29.45 → $32.45 (+10%)

Microsoft 365 E3 (no Teams): $27.45 → $30.45 (+11%)

Microsoft 365 E5 (no Teams): $48.45 → $51.45 (+6%)

Business suites

With Teams

Business Basic: $6.00 → $7.00 (+16%)

Business Standard: $12.50 → $14.00 (+12%)

Business Premium: unchanged at $22.00

Without Teams

Business Basic (no Teams): $4.40 → $5.40 (+23%)

Business Standard (no Teams): $9.29 → $10.79 (+16%)

Business Premium (no Teams): unchanged at $18.79

Frontline suites

With Teams

Microsoft 365 F1: $2.25 → $3.00 (+33%)

Microsoft 365 F3: $8.00 → $10.00 (+25%)

Without Teams

Microsoft 365 F1 (no Teams): $1.75 → $2.50 (+43%)

Microsoft 365 F3 (no Teams): $6.93 → $8.93 (+29%)

Standalone components

Windows E3: $6.63 → $7.63 (+15%)

Apps for Business: $8.25 → $10.00 (+21%)

EMS E3: $10.60 → $12.00 (+13%)

Entra Plan 1: $6.00 → $7.00 (+16%)

Windows Enterprise (per device): $5.85 → $7.63 (+31%)

Windows E5: $11.81 → $12.81 (+9%)

Microsoft 365 Apps: $12.00 → $14.00 (+17%)

EMS E5: $16.40 → $18.00 (+10%)

Entra Plan 2: $9.00 → $10.00 (+11%)

Microsoft 365 Apps (per device): $36.00 → $42.00 (+17%)

Purview Suite: unchanged at $12.00

Defender Suite: unchanged at $12.00

What is being added in summer 2026

Business Basic / Business Standard
+50GB email, URL time-of-click protection, Copilot Chat enhancements, and Copilot Chat Analytics.

Business Premium
+50GB email, Copilot Chat enhancements, and Copilot Chat Analytics.

Office 365 E1
URL time-of-click protection, Copilot Chat enhancements, and Copilot Chat Analytics.

Office 365 E3 / Microsoft 365 E3
Microsoft Defender for Office 365 Plan 1, plus Copilot Chat enhancements and analytics. Microsoft 365 E3 also gains Intune Remote Help, Intune Advanced Analytics, and Intune Plan 2.

Microsoft 365 E5
Includes Microsoft 365 E3 additions plus Microsoft Security Copilot, Intune Endpoint Privilege Management, Microsoft Cloud PKI, and Intune Enterprise Application Management.

Important rollout details

Feature additions begin rolling out in June 2026.

Microsoft says tenants will receive at least 30 days' notice through Message Center before packaging changes become available.

Rollout of the following is expected to be complete by August 1, 2026:

Microsoft Defender for Office 365 Plan 1
Intune Remote Help
Intune Advanced Analytics
Intune Plan 2
Intune Privilege Management
Microsoft Cloud PKI
Intune Application Management

Copilot note

Microsoft is also expanding Copilot Chat capabilities

The packaging update includes Copilot Chat enhancements and Copilot Chat Analytics across multiple Microsoft 365 suites. Microsoft notes that these enhancements include context-aware intelligence and Agent Mode in Word, Excel, PowerPoint, and Outlook.

Nonprofit pricing

Nonprofit pricing also changes

Nonprofit pricing remains tied to commercial rates through a fixed percentage discount, with affected products generally discounted by around 60% to 75%.

Microsoft 365 E3: $9.00 → $9.75

Microsoft 365 E5: $22.80 → $24.00

Business Standard: $3.00 → $3.50

F1: $0.56 → $0.75

F3: $2.00 → $2.50

Business Basic: remains free

Government update

Government pricing follows commercial logic

Government pricing will also be adjusted in line with commercial pricing, but packaging updates will follow government compliance frameworks, validation paths, and roadmap timing.

Microsoft 365 G3: aligned to Microsoft 365 E3 at +8%

Microsoft 365 G5: aligned to Microsoft 365 E5 at +5%

Office 365 G3 / GCC High / DoD: +13%, with phased increases where required by regulation

F1 / F3 Government equivalents: aligned to frontline increases

Digigen perspective

The right question is no longer just
“How much does Microsoft 365 cost?”

It is now: Which plan should we be on, what bundled features will we actually use, which add-ons become redundant, and when should we renew?

For many businesses, July 2026 is the right time to review Microsoft 365 Business, Microsoft 365 E3/E5, security add-ons, device management strategy, and overall total cost before the next renewal cycle.

Review Your Microsoft Plan

Post by Oliver Machwirth
Mar 27, 2026 2:01:42 PM

Investor and strategic advisor to Digigen

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Microsoft 365 Pricing and Packaging Updates for July 2026

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