Microsoft 365 licensing price increase from 1 July 2026 – What businesses need to know

Microsoft has confirmed that commercial Microsoft 365 pricing changes take effect from 1 July 2026 for new and renewing customers, with existing customers moving to the new pricing at their next renewal after that date.

Microsoft has officially announced a series of pricing changes across its Microsoft 365 commercial licensing portfolio, which will take effect from 1 July 2026 for new subscriptions and renewing customers. The changes impact a range of Microsoft 365, Office 365, EMS, Windows Enterprise and Microsoft Entra licences.

At the same time, some important licences are not currently listed as receiving a suite price increase in Microsoft’s published update, including Microsoft 365 Business Premium and Office 365 E1.

Charities and nonprofit organisations are expected to be impacted by the July 2026 Microsoft pricing increases, although they will continue to receive substantial nonprofit discounts.

Why are Microsoft increasing pricing?

Microsoft states that the changes reflect ongoing investments in cybersecurity, compliance, device management, AI-powered capabilities and cloud services.

Microsoft 365 has evolved significantly beyond traditional productivity software. Modern subscriptions now incorporate cyber security, compliance, device management, automation and AI-powered capabilities.

The July 2026 pricing changes reflect Microsoft’s ongoing investment in these services and its wider strategy of encouraging adoption of integrated platform solutions rather than standalone products.

Which licenses are going to be affected?

Microsoft 365 Business Basic, Business Standard, Apps for Business, E3, E5, Office 365 E3/E5, F1/F3, EMS E3/E5, Windows Enterprise E3/E5 and Entra ID P1/P2.

What About Charities and Nonprofit Organisations?

Microsoft’s July 2026 pricing changes are also expected to affect eligible nonprofit organisations.

While charities continue to receive substantial Microsoft discounts, some nonprofit licences are expected to increase in line with Microsoft’s wider pricing changes. However, Microsoft 365 Business Premium (Nonprofit) and Office 365 E1 (Nonprofit) are not currently listed as receiving a suite price increase in Microsoft’s published nonprofit update.

Estimated UK pricing change

Important: Microsoft has confirmed percentage increases and that pricing may vary by country and currency. Official UK GBP pricing has not yet been released by Microsoft. The figures below are estimates only. 

Why Business Premium deverves a special attention

Microsoft 365 Business Premium is not currently listed as receiving a suite price increase in Microsoft’s published July 2026 update.

For many SMEs, Business Premium already provides an attractive combination of productivity, cyber security, device management and compliance capabilities. As Business Standard pricing increases, the value proposition of Business Premium becomes even stronger.

Need Help Reviewing Your Microsoft Licensing?

At AMJ IT, we help organisations optimise Microsoft 365 licensing, improve cost efficiency and prepare for future renewals with confidence.

Our Microsoft licensing reviews identify unused subscriptions, opportunities for optimisation and potential cost savings while ensuring users remain on the most appropriate plans for their requirements.