How Much Does Office 365 Cost? Microsoft 365 Business Pricing in 2026

How Much Does Office 365 Cost? Microsoft 365 Business Pricing in 2026

Last updated September 1, 2026

How much does Office 365 cost for businesses in 2026? Microsoft 365 Business plans range from $7 to $22 per user per month on annual commitment. Business Basic costs $7 per user per month and covers web and mobile apps plus core cloud services. Business Standard costs $14 per user per month and adds full desktop app installations. Business Premium costs $22 per user per month and includes advanced security, device management, and compliance tools. Microsoft raised these prices on July 1, 2026: Basic rose 16.7 percent, Standard rose 12 percent, and Premium did not change. Paying month to month instead of annually costs about 20 percent more.

If you have been searching for a straightforward answer to how much Microsoft 365 costs for your business, you are not alone. The product has gone through naming changes, plan restructuring, and repeated pricing updates, including a commercial price increase that took effect on July 1, 2026. That makes it genuinely difficult to compare options, especially if you last evaluated Microsoft 365 a few years ago.

This guide cuts through the noise and focuses on what matters most: not just what each plan costs today, but which one actually makes sense for the way your business works, and what changed this summer.

Business Plans vs. Personal Plans: Which One Are You Shopping For?

This guide covers the Microsoft 365 Business plans, which are licensed per user, include business email on your own domain, and support up to 300 users. If you are shopping for a household instead, the consumer plans are a separate product line priced per subscription rather than per user: Microsoft 365 Personal is $99.99 per year, Family is $129.99 per year for up to six people, and the newer Premium consumer tier is $199.99 per year.

The consumer plans were not affected by the July 2026 commercial price increase, and they do not include business email, Teams for work, or any of the security and device management tooling described below. If you need a shared company domain, a managed email environment, or control over company devices, you need a Business plan.

It’s important, especially for small businesses, to discuss the difference between a business plan and a personal plan to see which is more appropriate for your circumstances.

Did Office 365 Prices Go Up in 2026?

Yes. Microsoft raised Microsoft 365 commercial list pricing effective July 1, 2026. It was the first broad list price increase to the small business plans in several years, and it did not land evenly across the lineup.

Three things are worth pulling out of that table, because they change the advice most businesses were given a year ago.

Business Premium was the only Business plan Microsoft left alone.

Before July, Business Premium cost 76 percent more than Business Standard. Today it costs 57 percent more. The gap narrowed from $9.50 to $8.00 per user per month, or from $114 to $96 per user per year. If you priced out Business Premium last year and decided the security upgrade was too expensive, the math has moved in your favor without you doing anything.

Business Basic took the largest percentage increase.

At 16.7 percent, the entry-level plan rose more than any other Business tier, which weakens the common “start on Basic and upgrade later” strategy. The gap between Basic and Standard actually widened, from $6.50 to $7.00 per user per month.

Existing customers are not billed the new rate immediately.

Current subscribers keep their previous pricing until their first renewal event after July 1, 2026. A Los Angeles business that renewed a 12-month term in June 2026 is still paying $12.50 per user for Business Standard and will not see $14.00 until that term renews in 2027. Knowing your renewal date is the difference between budgeting for this increase and being surprised by it.

Microsoft bundled some previously paid capability into the increase, including Copilot Chat enhancements such as inbox and calendar awareness, additional mailbox storage, and expanded Defender for Office 365 coverage on several tiers. Whether that offsets the increase depends entirely on whether your team uses any of it.

What Is Microsoft 365 and What Has Changed?

Microsoft 365 is the subscription version of what most people still call Office 365. The name changed in 2020, but the confusion has lingered, and Microsoft has not helped by continuing to use both names in different contexts. For practical purposes, if someone says Office 365 or Microsoft 365 in a business setting, they are talking about the same product family.

What has changed meaningfully is the scope of what the subscription includes. Microsoft 365 is no longer just a productivity suite. It is a platform that combines the familiar Office applications (Word, Excel, PowerPoint, Outlook) with cloud storage through OneDrive, communication and collaboration through Teams, enterprise-grade security tooling, device management through Intune, and increasingly, AI capabilities through Microsoft Copilot.

For small to mid-sized businesses, that evolution matters because choosing a plan is no longer just about which apps you need. It is about which combination of productivity, security, and IT management capability fits your business, and which gaps you would otherwise fill with separate tools at additional cost.

One app is on its way out. Microsoft Publisher will no longer be supported after October 2026 and has already been removed from Microsoft’s published app list for Business Standard. If your marketing or operations team still builds anything in Publisher, that migration belongs on your 2026 planning list.

Before deciding on the Microsoft 365 business plan, it’s important to do a search and see what other small businesses are saying about the different types of plans.

Microsoft 365 Business Plans: What You Actually Get

Microsoft offers three primary business plans for organizations with up to 300 users, plus a fourth option that covers desktop applications only. Here is what each one includes at its August 2026 price.

Microsoft 365 Business Basic — $7.00 per user per month

Business Basic is the entry-level plan and the most commonly misunderstood one. It does not include desktop installations of Word, Excel, or PowerPoint. This plan is web and mobile only. If your team works primarily in a browser, that distinction may not matter. If they rely on desktop Office applications with full functionality, it will.

What Business Basic does include is genuinely useful for a small business:

• Web and mobile versions of Word, Excel, PowerPoint, Outlook, and OneNote
• Microsoft Teams for chat, video calls, and collaboration
• Exchange Online business email with a custom domain
• SharePoint for intranet and team file sharing
• OneDrive with 1 TB of cloud storage per user
• Microsoft Bookings, Forms, Planner, and Lists
• Standard email filtering and anti-malware protection (advanced threat protection requires Business Premium)

There is also a Business Basic variant without Microsoft Teams at $5.40 per user per month, which is a practical option if your company already standardized on Slack, Zoom, or another communication platform and only needs email, web apps, and storage.

Business Basic is the right starting point for businesses with light productivity software needs, remote teams that work mostly in the browser, or organizations that want cloud collaboration and email without paying for desktop apps.

Microsoft 365 Business Standard — $14.00 per user per month

Business Standard is where most small to mid-sized businesses land, and for good reason. It includes everything in Business Basic plus full desktop installations of the Office applications across PC, Mac, tablet, and phone, on up to five devices per user. This is the plan most comparable to what people have historically thought of as “Office.”

What Business Standard adds over Basic:

• Desktop versions of Word, Excel, PowerPoint, Outlook, OneNote, and Access (PC only)
• Microsoft Teams with webinar hosting for up to 300 attendees
• Attendee registration and reporting tools for events
• Collaborative workflow tools through Microsoft Loop and Planner
• Video editing and content creation through Microsoft Clipchamp

For most businesses whose employees do meaningful work in Office applications, Business Standard is the practical minimum. The jump from $7 to $14 per user per month is a real cost increase, but replacing desktop Office with web-only alternatives typically creates more friction than the savings justify.

Microsoft also sells Microsoft 365 Business Standard with Copilot at $23.50 per user per month, which bundles the AI assistant into the license rather than adding it separately.

Microsoft 365 Business Premium — $22.00 per user per month

Business Premium is the plan IT professionals consistently recommend for businesses that take security seriously. It includes everything in Business Standard plus a substantial layer of security, compliance, and device management capability that would otherwise require separate products.

The security and management features that justify Business Premium include:

• Microsoft Intune Plan 1 for mobile device and endpoint management
• Microsoft Entra ID P1 for advanced identity, access management, and conditional access policies
• Microsoft Defender for Business with endpoint detection and response
• Microsoft Defender for Office 365 for advanced phishing and ransomware protection
• Microsoft Purview information protection and data loss prevention
• Exchange Online Archiving for advanced archiving and compliance retention

Here is the number that decides it for most businesses. Purchased separately at Microsoft’s own list prices, Intune Plan 1 ($8.00), Entra ID P1 ($7.00), and Defender for Business ($3.00) come to $18.00 per user per month. Moving from Business Standard to Business Premium costs $8.00 per user per month and includes all three, plus Purview data loss prevention and Defender for Office 365. The bundle is roughly 2.25 times cheaper than assembling the same stack piece by piece. Current standalone rates are published on Microsoft’s small business security pricing page.

For any business in a regulated industry, handling sensitive client data, or managing a hybrid workforce with personal and company devices touching business systems, Business Premium is the plan to model first rather than the upgrade to consider later. A Business Premium with Copilot bundle is also available at $32.00 per user per month.

Microsoft 365 Apps for business — $10.00 per user per month

Apps for business occasionally creates confusion in comparisons. It provides full desktop Office application installations plus OneDrive storage, but it does not include Exchange Online business email, Microsoft Teams, or SharePoint.

It is designed for businesses that host email elsewhere and need desktop Office apps plus cloud storage, which is a fairly narrow use case. It also took the largest percentage increase in July 2026, rising from $8.25 to $10.00. Most businesses evaluating Microsoft 365 for the first time will be better served by one of the three Business plans above.

Depending upon the size of your team, Microsoft Office 365 will have a variety of different costs. Make sure you take an accurate headcount with a thought to the future of growth before making decisions on your purchase.

What Office 365 Costs by Team Size

Per-user pricing is easy to underestimate at scale. Here is what each plan costs annually at four common company sizes, at annual commitment rates.

Hidden Costs and Add-Ons Worth Knowing About

The per-user pricing above covers the core plans, but several add-ons and adjacent costs affect the total picture.

Monthly billing costs about 20 percent more

Every price in this guide assumes an annual commitment. Month-to-month billing carries roughly a 20 percent premium, so Business Standard runs $16.80 instead of $14.00. For a 25-person business, choosing month-to-month flexibility over an annual term costs an extra $840 per year.

Microsoft Copilot

Copilot is an AI assistant that works across Word, Excel, Outlook, Teams, and other Microsoft 365 apps. Microsoft now sells bundled plans that include it: Business Standard with Copilot at $23.50 and Business Premium with Copilot at $32.00, uplifts of $9.50 and $10.00 respectively. Purchased as a standalone add-on, Microsoft 365 Copilot has commonly been priced at $30 per user per month, so the bundled SKUs are substantially cheaper. Which option applies to a given tenant depends on your licensing agreement, and it is worth confirming before you buy.

Copilot Chat

A more limited version of Copilot is included with paid Microsoft 365 plans at no additional cost, and it gained inbox and calendar awareness in July 2026. It is worth testing across your team before committing to the full Copilot license.

Other common add-ons

• Audio conferencing, which allows meeting attendees to dial in by phone, is not included in the standard business plans
• Microsoft 365 Backup, for extended backup retention beyond default limits
• Power Platform capability (Power Automate, Power BI, Power Apps) beyond what the business plans include
• Additional Exchange and SharePoint storage above the included allowances

For businesses planning a cloud migration to Microsoft 365, the licensing cost is rarely the largest variable. Migration complexity, data volume, and the expertise required to configure the environment correctly are typically bigger cost drivers than the per-user subscription fee. A Microsoft Office 365 migration handled correctly the first time is almost always cheaper than remediating one that was not.

Can You Buy Office 365 Just for Business Email?

Yes. Microsoft 365 Business Basic is the email-focused plan. It includes Exchange Online business email on your own domain, web and mobile Office apps, SharePoint, and 1 TB of OneDrive storage per user for $7.00 per user per month on annual commitment, or $5.40 without Teams. It does not include desktop installations of Word, Excel, or PowerPoint.

In practical terms, business email hosting on a custom domain for a 10-person company runs $840 per year with Teams, or $648 per year without it. That is the realistic floor for professional email on Microsoft 365.

The inverse case is Microsoft 365 Apps for business at $10.00 per user per month, which gives you the desktop applications and OneDrive but no email at all. Businesses that need both, which is most of them, are choosing between Business Standard and Business Premium.

Microsoft 365 vs. Google Workspace: Cost Comparison

After the July 2026 increase, something unusual happened: the three main Microsoft 365 Business tiers now cost exactly the same as their closest Google Workspace equivalents.

Because price is now identical at every tier, it is no longer a differentiator. The decision comes down to capability and fit. Microsoft 365 Business Premium includes full mobile device management through Intune, identity and conditional access through Entra ID P1, and endpoint detection and response through Defender for Business. Google Business Plus includes Vault and enhanced endpoint management but no direct equivalent to Intune, and its compliance tooling is generally less mature for regulated industries.

Storage cuts the other way at the entry level, where Google Business Starter offers 30 GB pooled per user against Microsoft’s 1 TB. Organizations already invested in Windows devices and Office file formats will usually find Microsoft 365 the more natural fit; teams that live in Google Docs and Chromebooks generally will not.

Microsoft 365 and Business Growth

Microsoft 365 does not operate in isolation for most growing businesses. Combined with Microsoft Dynamics 365 for CRM and ERP functions, it becomes a considerably more powerful platform for managing sales pipelines, customer relationships, and operational workflows.

That matters most for small to mid-sized businesses trying to scale without adding headcount. The integration between Microsoft 365’s productivity tools and Dynamics 365’s business data creates workflow efficiencies that standalone CRM implementations cannot replicate.

Digital transformation for small businesses increasingly runs through Microsoft 365 as a foundation, not just for Office apps and email, but as the identity, security, and collaboration infrastructure that other business systems are built on. Choosing the right plan from the start, and configuring it correctly, establishes a platform that scales with the business rather than requiring rearchitecting every few years.

How to Choose the Best Microsoft 365 Business Plan for Your Company

Choosing between Business Basic, Standard, and Premium is less about comparing feature lists and more about understanding what your business actually needs, and what not having a specific capability would cost you. Work through these steps before deciding.

1. Determine whether your team needs desktop Office applications. This is the first and most decisive question. If your employees work primarily in a browser, Business Basic at $7.00 may be sufficient. If they depend on desktop Word, Excel, or PowerPoint for complex documents, formatting work, or offline access, Business Standard is the minimum. Survey your heaviest Office users before assuming web apps are an acceptable substitute.
2. Price out your security requirements honestly. If your business handles sensitive client data, operates in a regulated industry, manages a hybrid workforce, or has had a security incident in the past two years, run the math. Intune Plan 1, Entra ID P1, and Defender for Business purchased separately total $18.00 per user per month. Moving from Standard to Premium costs $8.00 and includes all three plus data loss prevention. The comparison usually ends the debate.
3. Check your renewal date before you budget. The July 2026 increase applies at your first renewal after July 1, 2026, not immediately. If you renewed in the spring, you have months of runway at the old rate and time to plan. If you are renewing this quarter, build the new pricing into your budget now.
4. Count your actual users and project growth over 12 to 24 months. Microsoft 365 is priced per user, so the right plan at 10 users may not be the right plan at 30. Factor in anticipated hiring, and consider whether all users belong on the same plan or whether mixed licensing (Premium for staff handling sensitive data, Basic for limited-access roles) makes more sense.
5. Audit your current tool stack for redundancy. Many businesses paying for Microsoft 365 are also paying separately for video conferencing, file storage, project management, or security tools that Microsoft 365 already includes. A thorough audit of existing software spend often reveals that upgrading to a higher Microsoft 365 tier costs less than maintaining the redundant tools it replaces.
6. Decide whether to add Copilot now or later. If AI-assisted productivity is a near-term priority, compare the bundled SKUs ($23.50 for Standard with Copilot, $32.00 for Premium with Copilot) against the standalone add-on before you commit, and identify which users would actually use it daily. If it is a future consideration, make sure you are on Standard or Premium so the option stays open.
7. Account for migration and configuration cost alongside licensing. The subscription fee is the visible cost. Moving email, files, and workflows from a previous system, configuring security policies, setting up Teams, and training staff is frequently larger. Working with one of the best outsourced tech support companies in Los Angeles for the migration typically costs less over time than a do-it-yourself approach that requires remediation after go-live.
8. Plan for ongoing management. Microsoft 365, and Business Premium in particular, requires active administration: license management, security policy updates, conditional access configuration, device enrollment, and regular review of security alerts. If your business does not have internal staff with Microsoft 365 administration experience, factor in the cost of all-inclusive managed services to keep the environment properly configured and current.

The Right Plan Is the One That Fits How You Actually Work

Microsoft 365 remains one of the most cost-effective technology investments a small business can make, but only when the plan is matched to what the business actually needs. Underpaying for Business Basic when your team depends on desktop Office applications creates daily friction. Overpaying for Business Premium features nobody uses wastes budget that could go elsewhere.

The July 2026 price increase changed the calculus in one specific way worth acting on: Business Premium held at $22.00 while Business Standard rose to $14.00, so the security upgrade now costs $8.00 per user per month instead of $9.50. For most Los Angeles small businesses, Business Standard is the right starting point, with a serious look at Business Premium for any firm handling client data, managing remote employees, or operating under regulatory obligations. The cost difference between plans is modest. The cost of inadequate security or a misconfigured migration is not.

Be Structured can help you select, deploy, and manage the right Microsoft 365 plan for your organization. As an experienced managed IT services provider serving Los Angeles businesses, we handle everything from initial plan selection and Microsoft Office 365 migrations to ongoing administration, security configuration, and user support, so your team gets the most out of the platform from day one.

Contact Be Structured today to review your renewal date and confirm which Microsoft 365 plan is right for your business.