Microsoft announced in December 2025 that commercial Microsoft 365 pricing will increase effective July 1, 2026. It’s the biggest across-the-board price change since 2022, and it affects nearly every plan — including the ones most small businesses in the Vail Valley are running on.
Here’s a plain-English breakdown of what’s changing, what it’ll actually cost, and whether there’s anything worth doing before July.
What Are You Paying Right Now?
Most small businesses are on month-to-month Microsoft 365 billing — no annual commitment, seats go up or down as needed. If that’s you, here’s what you’re paying today per user, per month:
| Plan | Monthly Price (Today) |
|---|---|
| Business Basic | $7.20 |
| Business Standard | $15.00 |
| Business Premium | $26.40 |
Note: If you’re on an annual commitment billed monthly (rather than true month-to-month), Microsoft added a 5% surcharge to that structure back in April 2025. Your invoice may be slightly higher than the figures above.
What Changes on July 1, 2026?
| Plan | Now | After July 1 | Monthly Increase |
|---|---|---|---|
| Business Basic | $7.20/user | $8.40/user | +$1.20 |
| Business Standard | $15.00/user | $16.80/user | +$1.80 |
| Business Premium | $26.40/user | $26.40/user | No change |
For reference, those monthly prices are based on Microsoft’s list pricing with the standard 20% premium for month-to-month billing. The annual commitment prices (billed annually, no flexibility) go from $6 → $7 for Basic, $12.50 → $14 for Standard, and stay at $22 for Premium.
A 10-person team on Business Standard, for example, goes from $150/month to $168/month — $216 more per year. Not devastating, but it adds up, especially across multiple clients or if you’ve been putting off a licensing review.
What Are You Getting for the Higher Price?
Microsoft is bundling features that previously cost extra or required higher-tier plans. The additions vary by plan:
All plans (Basic, Standard, Premium): Mailbox storage increases by 50GB per user. Business Basic and Standard currently have 50GB mailboxes, so they go to 100GB. Business Premium already had 100GB, so it goes to 150GB. For businesses that are bumping up against storage limits, this is genuinely useful.
All plans (Basic, Standard, Premium): URL checks in Outlook and Office apps — basic protection that flags known malicious links before you click them.
Business Standard and above: Access to enhanced email security features from Microsoft Defender, including better phishing and malware detection.
Enterprise plans (E3, E5): Additional Intune device management capabilities and, for E5, Security Copilot agents.
All plans: Copilot Chat integrated into Word, Excel, PowerPoint, and Outlook. This is the baseline AI assistant — useful for drafting and summarizing, but not the same as a full Microsoft 365 Copilot license, which is still a separate add-on.
Whether these additions justify the increase depends on what you’re already using and what security tools you’re paying for separately.
The Business Premium Angle
The most important detail in this announcement for small businesses: Business Premium isn’t going up.
That might not sound exciting, but consider what Business Premium already includes: Microsoft Defender for Business, Intune device management, Conditional Access, Azure AD P1, and Entra ID features — tools that used to require expensive add-ons or enterprise licensing.
Before this announcement, the jump from Business Standard ($15/month) to Business Premium ($26.40/month) was $11.40 per user. After July 1, that gap narrows to $9.60 per user — and you’re getting significantly more security coverage in return.
If you have employees handling sensitive data, working on personal devices, or if you’ve been meaning to get serious about endpoint security, this pricing shift makes Business Premium a much easier conversation.
What Should You Do Before July?
1. Know what plan you’re on. Log into your Microsoft 365 admin center or ask your IT provider. A surprising number of businesses aren’t sure which plan they’re paying for.
2. Check your seat count. Are you paying for users who no longer work there? A quick cleanup before prices go up is easy money.
3. Consider whether Business Premium makes sense. If you’re on Business Standard and have more than a handful of users, the security features in Business Premium may well be worth the difference — especially now that the gap is smaller.
4. Don’t panic about early renewal. Locking in current pricing with an annual commitment sounds appealing, but it trades flexibility for a small delay. For most small businesses on month-to-month billing, it’s not worth the tradeoff unless you have a specific reason to lock in seats.
Need a Second Set of Eyes on Your Licensing?
Wavefinity works with small businesses across Eagle and Summit County on Microsoft 365 — setup, security, migrations, and ongoing support. If you want a quick review of what you’re running and whether it still makes sense heading into July, reach out. No pressure, just a straight answer.
