Insights · Microsoft 365 pricing
Microsoft 365 list prices rose on 1 July 2026. Microsoft 365 E5 went from $57 to $60 per user per month, E3 from $36 to $39, and Business Standard from $12.50 to $14. For many enterprises, the real increase is larger than the list change suggests, because the volume discounts Microsoft removed in November 2025 stack on top. Existing customers stay on current pricing until their next renewal.
For a large Enterprise Agreement estate, the headline rise understates the bill. Microsoft ended the automatic Level B, C and D volume discounts in November 2025. Those were worth roughly 6 to 12%, depending on user count. The July list increase then lands on top of a price that had already gone up.
The independent analysts at SAMexpert put a figure on it. For a 25,000-user E5 organisation that previously held a Level D discount, the list rise adds about $900,000 a year and the lost discount adds around $2 million, taking the combined impact to roughly 19.6%. For Microsoft 365 E3, the same maths comes to about 23%.
So the real question isn't the three dollars on E5. It's whether you're still paying for seats nobody uses, because every unused license now costs more.
| Plan | Was | Now | Change |
|---|---|---|---|
| Office 365 E1 | $10.00 | $10.00 | no change |
| Office 365 E3 | $23.00 | $26.00 | +13% |
| Office 365 E5 | $38.00 | $41.00 | +8% |
| Microsoft 365 E3 | $36.00 | $39.00 | +8% |
| Microsoft 365 E5 | $57.00 | $60.00 | +5% |
| Business Basic | $6.00 | $7.00 | +16% |
| Business Standard | $12.50 | $14.00 | +12% |
| Business Premium | $22.00 | $22.00 | no change |
| Frontline F1 | $2.25 | $3.00 | +33% |
| Frontline F3 | $8.00 | $10.00 | +25% |
Prices are Microsoft's US list, per user per month, on an annual commitment. Local currency prices vary, but the market moves off these figures. Of these, Business Premium and Office 365 E1 are the only two holding flat.
Existing customers keep their current pricing until they renew. When you renew after 1 July 2026, the new prices apply for the new term. Much of the advice published this spring said the same thing: renew early, lock the old rate. As of 1 July, that window has largely closed.
You can no longer dodge the increase by timing it. But you can decide how many seats it applies to. A license review before you renew does two things. It strips out the licenses nobody is using, and it checks whether every user on E5 actually needs E5. The higher price then lands on a smaller, right-sized estate.
Two limits are worth naming. You can normally only cut your seat count at renewal, not mid-term, because an Enterprise Agreement holds you to a baseline, and annual CSP terms work the same way. That's exactly why the review belongs before you sign. And stepping a user down removes real capability: from E5 you lose Defender and Purview, Entra ID P2 and Power BI Pro; from E3 to Office 365 E1 you lose desktop Office entirely. The test is genuine need, security and compliance included, not cost alone.
Most people telling you to renew earn a margin on that renewal. "Just renew" is easy advice to give when the renewal is how they get paid.
ilion sells Microsoft licenses at cost plus 1%, shown openly, and we make our money on advice, not on your license volume. So we will tell you to buy less when you should buy less, and we will show you what each option costs per year before you sign anything. Independent, across the EU and UK, with no reseller margin sitting between you and the right answer.
Before you renew into the new prices, send us what you run today. You get a specific answer back within one business day.
Show us what you run today. You get a no-obligation quote back, in real numbers.