Microsoft has confirmed that commercial Microsoft 365 pricing will increase from 1 July 2026. If your business runs on Microsoft 365, this affects your IT budget from your next renewal.
Microsoft is bundling in security and AI features that previously cost extra. If you do nothing before your renewal, you will pay more without necessarily understanding what changed or whether your plan still fits your business.
Here is what is changing, who it affects, and what you should do before July.
Which plans are affected
The increases apply to the most common SMB plans. The table below shows indicative AUD pricing per user per month:
| Plan | Monthly licence |
|---|---|
| Microsoft 365 Business Basic | $12.60 |
| Microsoft 365 Business Standard | $25.20 |
| Microsoft 365 Business Premium (no change) | $39.50 |
| Microsoft 365 Copilot Business | $37.70 |
| Microsoft 365 E3 | $70.08 |
AUD per user per month. Indicative only. Prices not yet finalised by Microsoft.
What Business Premium’s unchanged price actually means
Business Basic and Standard go up. Business Premium does not.
For a 20-person business on Business Standard, the July increase adds to your monthly bill. For the same team on Business Premium, the bill doesn’t change. Business Premium includes Intune device management, Conditional Access, Defender for Office 365, and Azure Information Protection. These are not extras. They are in the base plan.
If you are on Business Standard and paying for any security add-ons, the gap between Standard and Premium almost certainly closes once you factor in what you are already spending. We work through this maths as part of a licence review.
What you get for the increase
Microsoft is not just raising prices. Several security and AI features that previously required add-ons are now bundled into existing plans:
Mailbox storage doubles to 100 GB per user across Business Basic, Standard, and Premium. If your team has been hitting storage limits, this resolves it.
URL protection comes to Business Basic, Business Standard, and Office 365 E1. Every link in emails and Office documents is checked against Microsoft’s threat database before it opens.
Defender for Office 365 Plan 1 is added to E3 licences. If you are on E3 and currently paying for a Defender add-on, that line item may become redundant.
Microsoft Copilot Chat is embedded across all plans for AI-assisted writing, summarisation, and calendar management. This is not the full paid Copilot licence, but it brings AI tools to every user as standard.
Security Copilot comes to E5 at 400 Security Compute Units per month per 1,000 licenced users.
The Copilot Chat rollout matters beyond the feature itself. Your staff will have AI tools available in their email and documents from July, whether your business has an AI usage policy or not. If you haven’t thought about that yet, it’s worth a conversation with your IT provider.
A new bundle worth knowing about
Microsoft is introducing a Security and Intune bundle as an add-on for Microsoft 365 E3 customers. This bundle combines Defender for Endpoint, Defender for Office 365, Purview Information Protection, and Intune endpoint management into a single package.
Previously, getting that security stack meant upgrading your whole organisation to E5. For a 30-person business, that is a significant jump in monthly cost. The new bundle gives E3 customers enterprise-grade security without paying for every E5 feature. Industry estimates put the bundle at USD $12–15 per user per month on top of E3, which represents a meaningful saving versus a full E5 upgrade.
If you are on E3 and have been considering E5 for the security features, hold off until bundle pricing is confirmed.
What to do before July
Frequently asked questions
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