If your Microsoft 365 invoice looks a little heavier lately, you are not imagining it. On July 1, 2026, Microsoft raised the list price of several business plans. Business Basic went from six dollars to seven dollars per user per month, and Business Standard, the plan a great many small offices run on, went from $12.50 to $14. Business Premium held steady at $22. Businesses on annual commitments kept their old rate until their first renewal after July 1, which means offices are meeting the new number one renewal at a time, all the way through next June. That is the Microsoft 365 price increase in a nutshell, and it deserves more attention than a shrug at the invoice.
What the Microsoft 365 Price Increase Really Costs You
Nobody reading this is going to negotiate Microsoft’s list price. What you do control is how many licenses you pay for, which plan each person is on, and how you commit to them. For many offices, those decisions are worth more than the increase itself. Consider a twenty-person office on Business Standard. The price change adds $360 a year. Three licenses still assigned to people who no longer work there cost $504 a year at the new rate, and those were quietly costing money long before July.
So start with quantity. Pull the list of licensed users and hold it up against the people who actually work for you today. Look for former employees, last summer’s seasonal help, a mailbox someone licensed for a project years ago, and test accounts nobody remembers creating. Each one bills every month. One caution before you start removing licenses: Microsoft keeps a mailbox for only 30 days after its license is removed. If a departed employee’s email still matters, convert it to a shared mailbox first. Shared mailboxes generally need no license up to 50 GB, so the history stays and the monthly charge goes away.
Why Renewal Timing Matters for Microsoft 365 Licenses
Then look at timing, because this is where offices get caught. Under Microsoft’s current licensing rules, an annual subscription can generally be reduced only within about seven days of purchase or renewal. Miss that window and you pay for every seat until the next renewal, whether anyone uses it or not. Month-to-month subscriptions give you flexibility, but they cost 20 percent more, and annual plans billed monthly carry a smaller 5 percent premium. The practical answer is to know your renewal date and put a license review on the calendar a few weeks ahead of it. According to Pax8, one of Microsoft’s largest cloud distributors, seat reductions after that first week can only be scheduled to take effect at a future date, which in practice means the renewal.
Choosing the Right Microsoft 365 Plan for Each Person
Finally, check the fit. Not everyone needs the same plan. Someone who only needs email and the web and mobile versions of Word and Excel may be well served by Business Basic. At the other end, the increase narrowed the gap between Business Standard and Business Premium from $9.50 to $8 per user per month. Premium adds Microsoft’s device management and more advanced security features, so if you are already paying a separate vendor for similar protection, the comparison is worth running.
A price increase is easy to grumble about and just as easy to ignore. It is also a good excuse to actually read the invoice. Give it twenty minutes before your renewal date. The seats you are paying for that nobody is sitting in will not announce themselves.
Until next time, keep IT simple.
Dave
CMIT Solutions of Wilmington
