Microsoft Raised M365 Prices for July 2026. Business Premium Got a Pass.
TL;DR
- Microsoft 365 commercial SKU price increases take effect July 1, 2026, with monthly commit pricing running 20 percent above annual commit.
- Business Premium and Office 365 E1 are the two SKUs not increasing in price as of the July 2026 changes.
- The Business Standard to Business Premium gap narrows from $9.50 to $8 per user, making the upgrade conversation easier than it has ever been.
- GCC and GCC High plans increase approximately 8 percent on the same July 1, 2026 date.
- Microsoft is bundling baseline Copilot features into core SKUs, which is not the same thing as the full Microsoft 365 Copilot license.
Renewal season has a deadline attached this year. Microsoft has confirmed pricing changes across the Microsoft 365 lineup effective July 1, 2026, and if your clients renew annually under New Commerce Experience, the January through March renewal wave is the window to act on them.
This is not speculation or channel rumor. The changes are announced, dated, and published. Three of them matter: commercial SKU increases, government SKU increases, and local currency adjustments outside the US. We will take them in order, then get to the moves worth making before July.
How much commercial SKUs go up on July 1, 2026
Microsoft published the new annual commit pricing in its Advancing Microsoft 365 announcement (opens in new tab). Monthly commit runs 20 percent above these numbers, same as today.
Most plans increase. Two do not:
- Business Premium: no change
- Office 365 E1: no change
If you manage dozens or hundreds of seats per client, the increases compound fast across a book of business. Build them into renewal budgets now, not at the renewal meeting.
One more note from the announcement: Microsoft flagged that nonprofit pricing may be impacted in the future, but final details have not been released as of February 2026.
Why Business Premium holding flat is the real story
Business Premium was already one of the strongest value plays in the Microsoft portfolio. Holding its price while everything around it rises makes the Business Standard to Business Premium conversation easier than it has ever been.
Run the before and after:
- Before these changes: $12.50 to $22 felt like a steep jump to put in front of a client.
- After July 1, 2026: $14 to $22, an $8 gap instead of $9.50.
For that $8, the client picks up Intune, Defender for Business, Conditional Access, device compliance, and the rest of the Business Premium security stack. If you have been waiting for the right moment to standardize clients on Business Premium, Microsoft just handed it to you. We cover the full upgrade case in our Business Premium upgrade guide.
What Microsoft is adding alongside the increases
The price changes come paired with more value packed into the suites.
Intune Suite capabilities move into the bundles. Advanced endpoint management features that were previously paid add-ons are being integrated further into higher-tier plans, fully in E5 and partially in E3.
Advanced email protection reaches the Office SKUs. Microsoft continues pushing advanced email security deeper into the legacy Office product lines, which is an interesting shift given how Microsoft has historically positioned the Microsoft 365 bundles against them.
Mailbox storage roughly doubles in many plans. Based on the +50GB column in Microsoft's table, many plans move toward 100 GB per user, up from 50 GB.
Baseline Copilot lands inside core SKUs. Microsoft is bundling basic Copilot functionality directly into core plans: email summarization, basic drafting in Word, light analysis in Excel, and presentation assistance in PowerPoint.
That last one deserves a warning label. Bundled basic Copilot is not the full Microsoft 365 Copilot add-on license, and the distinction will confuse clients and sales teams alike. Make sure your team can explain the difference before a client asks why they are still being quoted for Copilot licenses they think they already have.
Government tenants: GCC and GCC High rise about 8 percent
Public sector pricing moves too. Per Microsoft's government announcement (opens in new tab), Government Community Cloud (GCC) and GCC High offerings increase approximately 8 percent across affected plans, on the same July 1, 2026 effective date.
Business Premium remains unchanged on the government side as well. If you serve public sector clients, this belongs in your 2026 planning conversations now, because government procurement cycles do not move quickly enough to absorb a surprise in June.
Outside the US: currency adjustments cut both ways
For organizations outside the United States, Microsoft is implementing local currency adjustments (opens in new tab) across its commercial cloud.
In some regions pricing may actually decrease slightly to align with USD list pricing; in others it increases as exchange rates normalize. It is a smaller headline than the SKU changes, but for MSPs billing in affected currencies it can meaningfully move renewal numbers.
Four moves to make before your renewals land
January through March is heavy renewal season for annual NCE agreements, which means the decisions happen now, not in June.
- Map every renewal date against July 1, 2026. Know which clients renew before the increase and which renew after. That single date determines whether you are quoting old pricing or new.
- Model the cost impact per client. Multiply the increases across each client's actual license counts so the renewal conversation starts with a number, not a shrug.
- Audit for license waste. Are Business Standard users better served on Business Premium at the narrower gap? Are there E5 seats nobody uses? Departed users still holding licenses? Shared mailboxes assigned full licenses? Every one of those is money the increase makes more expensive.
- Lock in where it makes sense. If Business Premium fits the environment, securing it now insulates the client from whatever adjustment comes next.
The audit step is the one that pays for the other three. A tenant-by-tenant license review surfaces the unused seats and misassigned licenses that quietly absorb whatever budget the price increase was about to claim.
Frequently asked questions
When do the Microsoft 365 price increases take effect?
July 1, 2026, for both commercial and government (GCC and GCC High) SKUs. Renewals that land before that date lock in current pricing for the term; renewals after it pay the new rates.
Is Business Premium going up in price?
No. As of the announced July 2026 changes, Microsoft 365 Business Premium is unchanged in both commercial and government pricing. Office 365 E1 is also unchanged. Microsoft has noted nonprofit pricing may be impacted later, with final details not yet released.
Do the bundled Copilot features replace the Microsoft 365 Copilot license?
No. The bundled capabilities cover basics like email summarization, drafting in Word, light Excel analysis, and PowerPoint assistance. The full Microsoft 365 Copilot add-on remains a separate license, and clients will conflate the two unless you explain the difference.
Find the license waste before the price increase finds it
CloudCapsule flags unused licenses, seats still assigned to departed users, and licensed shared mailboxes across every tenant you manage, alongside a full security and configuration assessment. Run it before your July renewals.
Run a free scan
Written by
Nick Ross
CEO · Microsoft MVP · Founder, T-Minus 365
Nick is not just a CEO, he's a respected thought leader and influencer in the MSP space. Tens of thousands of MSPs learn through his YouTube channel, T-Minus365. Nick has been honored as a three-time Microsoft MVP for his educational content; his expertise and influence are the backbone of our mission, ensuring that you are in the best hands when it comes to security.
Nick joined Pax8 in 2017, where he would ultimately oversee product management for PSA and Microsoft integrations. Following his tenure at Pax8, Nick has continued to demonstrate his leadership prowess as an executive at various MSPs, culminating in his most recent role at Sourcepass.
Nick holds a Bachelor's Degree in Business Management from Florida State University, as well as a Minor Degree in Entrepreneurship. In his free time, Nick is an avid hiker, reader, and fitness-junkie.
