Microsoft announced on Thursday (4) that it will implement a global price increase for Microsoft 365 commercial and government plans, with the new pricing set to take effect on July 1, 2026. The adjustment affects Business, Enterprise, and Government tiers of the productivity suite formerly known as Office.
This marks Microsoft’s first commercial price increase since 2022, reflecting what the company describes as ongoing investments in artificial intelligence, security, and productivity capabilities across the platform.
Why Microsoft Is Increasing Prices
According to Microsoft, the new price structure corresponds to continued advancements in the Microsoft 365 ecosystem. The company emphasized that AI-driven innovation and enhanced cybersecurity solutions have significantly expanded the value of its subscription offerings.
Nicole Herskowitz, Corporate Vice President of Microsoft 365, highlighted that more than 1,100 new features were introduced in the last year alone.
“We are committed to providing safe and innovative solutions for an AI-driven future,”
said Herskowitz in the announcement.
Microsoft’s recent focus on Copilot AI, threat protection enhancements, cloud governance tools, and collaboration upgrades is part of what the company cites as justification for the adjustment.
New Prices for Commercial Plans in the U.S.
Microsoft released the updated U.S. pricing to establish a reference for global adjustments. These values represent the monthly cost per user:
- Microsoft 365 Business Basic: from US$6 → US$7 (+16%)
- Microsoft 365 Business Standard: from US$12.50 → US$14 (+12%)
- Microsoft 365 E3: from US$36 → US$39 (+8%)
- Office 365 E3: from US$23 → US$26 (+13%)
Additional adjustments include:
- Microsoft 365 F1 (Frontline workers): from US$2.25 → US$3
- Microsoft 365 Business Premium: no change, remaining at US$22
These increases apply to commercial and government customers across all regions.
Impact on Markets
While the U.S. dollar pricing serves as a baseline, Microsoft confirmed that “local market adjustments” will be applied worldwide. This means:
- Companies using Microsoft 365 Business or Enterprise licenses will see pricing increases.
- Currency fluctuations, local taxes, and regional market conditions will influence the final price table.
- The updated pricing will impact 2026 corporate budgets and contract renewals.
Microsoft has not yet disclosed specific numbers, but organisations with multi-year agreements may be shielded temporarily depending on contract terms.
Will Individual Consumers Pay More?
For now, no.
Microsoft stated that the 2026 changes apply strictly to commercial and government plans.
There is no announced adjustment for:
- Microsoft 365 Personal
- Microsoft 365 Family
Consumer plans were already updated earlier in 2025 — the first major increase for home users in more than a decade — and remain unaffected by this newly announced commercial pricing overhaul.
The 2026 price increase underscores Microsoft’s strategy of anchoring Microsoft 365 as an AI-first productivity platform, driven heavily by Copilot and enterprise-level security features. As organisations accelerate AI adoption, Microsoft appears confident that bundling intelligence, automation, and compliance tools into Microsoft 365 justifies the higher subscription costs.
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