Microsoft 365 pricing is increasing from 1 July 2027, and for some businesses, the impact could be significant.
Depending on the licences you use, costs are rising by anything from 5% to over 40%. While some organisations won't feel the effect immediately, others still have a short window to review their licensing, secure better value, and potentially lock in current pricing before increases take effect.
Here's what is changing, who is affected, and what action you should consider taking before the deadline.
The increases range from 5% on Microsoft 365 E5 to 43% on Microsoft 365 F1 without Teams. The most common SMB plans look like this:
| Plan | Increase |
|---|---|
| Microsoft 365 Business Basic | ~17% |
| Microsoft 365 Business Standard | ~12% |
| Microsoft 365 Business Premium | No change |
| Office 365 E1 | No change |
| Office 365 E3 | +13% |
| Microsoft 365 E3 | +8.3% |
| Microsoft 365 E5 | +5.3% |
| Microsoft 365 F1 (Frontline) | +33% |
| Microsoft 365 F3 (Frontline) | +25% |
UK pricing mirrors the same percentage increases applied to current GBP list prices. These are global list adjustments, separate from any currency exchange tweaks that happen on Microsoft's regular twice-yearly harmonisation schedule.
It's worth noting that Business Premium is the only mainstream business licence that isn't increasing in price. This appears to be a deliberate move by Microsoft to position Business Premium as the default secure licence for small and mid-sized organisations, as it already includes many of the security and management features that are being expanded elsewhere.
The price gap between Business Standard and Business Premium is now narrower than it has ever been. If your business is currently on Business Basic or Business Standard, you will soon pay more. Businesses that previously considered Business Premium and decided it was too expensive relative to Standard should rerun that calculation.
Microsoft frames this as a value update rather than a straight price hike. Business Basic and Standard customers get an extra 50GB of email storage, URL time-of-click protection, and Copilot Chat enhancements — including calendar and inbox awareness and access to Word, Excel, and PowerPoint agents.
Microsoft has now embedded Copilot across Word, Excel, PowerPoint, Outlook and Teams: generate drafts and summarise documents in Word, get help with formulas and create charts in Excel, draft emails and summarise long threads in Outlook.
Whether those additions justify the cost will depend on how your team actually uses the platform, which is exactly why a licence review is worthwhile before you commit.
This depends on how you're billed:
The new pricing will take effect at your next renewal date after 1 July 2026. This applies whether you purchase licences directly from Microsoft or via a Cloud Solution Provider (CSP). Understanding your renewal date is, therefore, key to knowing when the increase will affect you.
In simple terms:
If your Microsoft 365 annual renewal is approaching, you may still have an opportunity to secure another 12 months at today's rates before the increases take effect.
While eligibility depends on your agreement and renewal date, it's worth checking now rather than waiting until after 1 July.
If you're a Netitude client, speak to your Virtual IT Director as soon as possible, and we'll advise on the options available to you.
Licence management is part of what we do for every client. We regularly review your Microsoft 365 usage to make sure you're only paying for what you need — removing ghost accounts, identifying over-provisioned users, and flagging anyone who could benefit from a plan change.
A good licence audit will spot things like ghost users whose licences can be removed or reassigned, users who may be over-provisioned because they are on the wrong plan, and unused add-ons that are inflating licensing costs.
Given the incoming price increases, this kind of review is more valuable than ever. If you're paying for seats you don't need, now is the time to find them — before the new rates kick in.
If you're unsure how these changes affect your business, or you want us to review your current Microsoft 365 setup before 1 July, get in touch with your account manager or drop us a message. We'll take a look and make sure you're not paying more than you need to.
With Microsoft 365 costs increasing in just a few days, now is the ideal time to review your licensing.
Whether you're looking to reduce unnecessary spend, assess whether Business Premium now represents better value, or understand when the increases will affect you, our team can help.
Contact Netitude today for a Microsoft 365 licence review.