Your next Microsoft 365 renewal costs more. Here is the arithmetic.

Microsoft announced the change in December 2025 and it took effect on 1 July 2026. If your subscription renewed before that date, nothing has happened to your bill yet. That is exactly why this catches people. The increase arrives quietly, on a renewal that most offices let roll over without reading.

What changed

For the plans small and mid sized firms actually buy, the list prices moved like this. Business Basic rose from $6 to $7 per user per month. Business Standard rose from $12.50 to $14. Business Premium did not move and still lists at $22. On the enterprise side, Microsoft 365 E3 went from $36 to $39 and E5 from $57 to $60. Office 365 E1 stayed at $10.

The percentages look worse at the bottom of the range than at the top. Basic is up by about a sixth. E5 is up by about a twentieth. Frontline plans took the steepest rise of all, with F1 moving from $2.25 to $3.

Do the sum for your own headcount

Take a firm of 40 people on Business Standard. The difference is $1.50 a head each month, so 40 times $1.50 times 12, which is $720 a year. On Business Basic the same firm pays $480 more. Neither figure will sink anyone. Both are large enough that somebody should have approved them on purpose.

Here is the part we find more interesting. Before July, moving a person from Standard to Premium cost an extra $9.50 a month. Now the gap is $8. Premium includes device management and a stronger set of security features, and plenty of firms pay separately for tools that overlap with it. If you are paying another vendor for endpoint protection or device management, the honest comparison is no longer Standard against Premium. It is Standard plus those invoices against Premium alone.

Who this affects

Anyone renewing a commercial Microsoft 365 subscription after 1 July 2026. Existing terms hold their committed price until they end, which means a firm that signed an annual term in May is protected until next May, and a firm on a monthly term has already been paying the new rate for a while.

It also affects anyone planning a move from Google Workspace this winter. Budget with the new numbers, not with a blog post from last year.

What we would do this month

Start with the licences you are not using. Most tenants carry accounts for people who left, shared mailboxes carrying a paid licence they do not need, and a few seats bought for a project that ended. Clearing those often covers the increase on its own. Then look at the plan mix. Not everyone needs the same plan, and a warehouse team that lives in Teams and a browser is a different case from the finance team.

Last, ask for the renewal quote early and read it. A list price is where the conversation starts.

Where X-Axis fits

We run licence reviews as part of our Microsoft 365 work across the United States and Canada. The pricing estimator uses the current list prices, so you can see a range for your own headcount before you talk to anyone.