Microsoft published a new price list on July 1, 2026. Existing customers remain on current pricing until renewal. The increase arrives at that renewal, and what you do beforehand can shape how much of it you pay.
Here is the short version. Enterprise suites rose 5 to 14 percent, frontline plans rose 25 to 43 percent, and Windows Enterprise rose 31 percent per device. Microsoft’s own wording: existing customers remain on current pricing until renewal. That makes your renewal date a price event. Organizations that prepare with a clean inventory and a usage baseline are better positioned to negotiate. Those that wait until 30 days before signature risk absorbing more of the increase.
Microsoft announced the repricing in December 2025 and it took effect on July 1, 2026. It covers Microsoft 365 and Office 365 suites, frontline plans, business plans, and standalone components.
The increases are not uniform. A few SKUs did not move at all. Others jumped by a third or more. Where your organization lands depends entirely on your license mix, which is exactly why the headline percentages tell you very little about your own exposure.
Which Microsoft 365 licenses went up, and by how much?
Suites, US list price per user per month, with Teams:
| License | Before | After | Change |
|---|---|---|---|
| Office 365 E1 | $10.00 | $10.00 | 0% |
| 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% |
| Microsoft 365 F1 | $2.25 | $3.00 | +33% |
| Microsoft 365 F3 | $8.00 | $10.00 | +25% |
| Business Basic | $6.00 | $7.00 | +16% |
| Business Standard | $12.50 | $14.00 | +12% |
| Business Premium | $22.00 | $22.00 | 0% |
Suites without Teams, US list price per user per month:
| License | Before | After | Change |
|---|---|---|---|
| Office 365 E1 (no Teams) | $6.79 | $6.79 | 0% |
| Office 365 E3 (no Teams) | $14.45 | $17.45 | +14% |
| Office 365 E5 (no Teams) | $29.45 | $32.45 | +10% |
| Microsoft 365 E3 (no Teams) | $27.45 | $30.45 | +11% |
| Microsoft 365 E5 (no Teams) | $48.45 | $51.45 | +6% |
| Microsoft 365 F1 (no Teams) | $1.75 | $2.50 | +43% |
| Microsoft 365 F3 (no Teams) | $6.93 | $8.93 | +29% |
| Business Basic (no Teams) | $4.40 | $5.40 | +23% |
| Business Standard (no Teams) | $9.29 | $10.79 | +16% |
| Business Premium (no Teams) | $18.79 | $18.79 | 0% |
Selected standalone components, US list price:
| Component | Before | After | Change |
|---|---|---|---|
| Windows Enterprise (per device) | $5.85 | $7.63 | +31% |
| Microsoft 365 Apps | $12.00 | $14.00 | +17% |
| Apps for Business | $8.25 | $10.00 | +21% |
| EMS E3 | $10.60 | $12.00 | +13% |
| Entra Plan 1 | $6.00 | $7.00 | +16% |
| Windows E3 | $6.63 | $7.63 | +15% |
Prices and percentage changes are Microsoft’s published US list figures. Education and consumer pricing did not change. Government pricing follows commercial, with some increases phased over multiple years.
Does the increase affect existing customers?
Not today. Microsoft’s own wording: “Existing customers remain on current pricing until renewal.” Its FAQ goes one step further: existing customers see the new prices at their next renewal after July 1, 2026.
That sounds like relief. It is actually the most important line in the announcement. Until renewal, there may be little visible urgency. Then the renewal arrives, and the affected SKUs can reprice together.
Your renewal date is now a price event. Treat it like one. Renewals after July 1 start from this higher published baseline for the affected SKUs.
What does this mean for your Enterprise Agreement renewal?
Enterprise Agreement pricing is negotiated, not taken off the shelf. But the negotiation starts somewhere, and from July 1 it starts from the new list. Microsoft’s announcement does not name agreement types; its FAQ says the new pricing applies to new and renewing customers globally. In practice, the higher list becomes a new reference point in EA renewal conversations.
Three things determine what you actually pay.
Your license mix. The frontline SKUs moved the most. An estate heavy in F1 and F3 licenses faces a much larger real increase than the enterprise-suite headlines suggest. Model your own weighted increase across your actual SKU counts before Microsoft models it for you.
Your waste. Every license assigned to nobody, or to someone who has not opened the software in 30 days, absorbs the increase too. In our experience the assigned-versus-active gap is one of the fastest ways to surface potential savings in a Microsoft estate. We cut a federal agency’s Microsoft 365 bill by 39 percent in two months, and most of that came from paying only for what was actually used.
Your timing. Walking into a renewal 30 days out with no data often leaves little room beyond accepting the quote. Starting 120 days out, with a clean inventory, a usage baseline, and alternatives priced, creates room to negotiate. Microsoft’s sellers have quotas and quarters like everyone else. Preparation is leverage.
How do you cut the increase before you sign?
Start with the assignment report. Compare licenses assigned to 30-day active users, per SKU. That gap is your opening position, and it is money you are paying today for software nobody opens. Our Microsoft 365 optimization work typically starts exactly here.
Right-size the tiers. Not everyone assigned an E5 needs an E5, and not every frontline worker needs F3 over F1. The price gaps between tiers just widened, which makes tier discipline worth more than it was in June. If you are not sure where the line sits, start with which users actually need E5.
Question the standalones. Windows Enterprise per device and Microsoft 365 Apps rose sharply. Check for overlap with what your suites already include before renewing them on autopilot.
Price the add-ons on usage, not optimism. Copilot and the other add-ons should earn their seats with usage data, the same standard as everything else on the agreement.
Then negotiate the renewal as a whole. Discount level, true-up terms, payment terms, price protection through the term. Each can be part of the conversation when you arrive with your own numbers. That is contract negotiation, not procurement admin, and the result shows up in the unit price you carry for the next three years.
One more thing worth knowing. If a true-up or compliance review follows the renewal, the same clean dataset also strengthens your audit defense. One body of work can support both conversations.
Where UMS fits
We have spent 25 years negotiating with software publishers on behalf of enterprises and government, including large public-sector Microsoft estates. The City of New York has saved more than $800 million across its software estate over that partnership.
We are paid only from the savings we find. No savings, no fee. If your Microsoft renewal lands in the next 12 months, the increase is already on your calendar whether you have looked at it or not. Talk to us before you sign.
Frequently asked questions
When does the Microsoft 365 price increase take effect? July 1, 2026 for new customers. Existing customers see the new prices at their next renewal after that date, per Microsoft’s published FAQ.
Does the July 2026 price increase affect existing Microsoft 365 customers? Not immediately. Microsoft states that existing customers remain on current pricing until renewal. The new prices apply to your agreement the day you renew, which makes the renewal date the moment the increase actually lands.
Which Microsoft 365 plans increased the most? Frontline plans. Microsoft 365 F1 rose 33 percent and F3 rose 25 percent in the with-Teams versions. Without Teams, F1 rose 43 percent. Among standalone components, Windows Enterprise per device rose 31 percent and Microsoft 365 Apps rose 17 percent.
Did education or consumer pricing change? No. Microsoft states there are no changes to education pricing or consumer pricing in the July 2026 update.
Does the increase apply to government customers? Yes. Government pricing follows the commercial changes, including GCC, GCC High, and DoD environments, with some increases phased over multiple years.
Can you negotiate the Microsoft 365 price increase at renewal? Enterprise pricing is negotiated, not taken off the shelf. The published list is Microsoft’s opening position, not the outcome. Your license mix, usage data, tier discipline, and preparation time help shape what you actually pay.
Source notes
- Microsoft 365 Pricing and Packaging Updates (Microsoft Licensing Resources): the published SKU-level price changes effective July 1, 2026, and the “existing customers remain on current pricing until renewal” language.
- Microsoft 365 Pricing and Packaging Updates public FAQ (Microsoft): renewal timing for existing customers, education and consumer exclusions, government treatment, and global applicability.
- Advancing Microsoft 365: New capabilities and pricing update (Microsoft 365 Blog, December 2025): Microsoft’s original announcement of the changes.
- UMS Microsoft EA renewal: UMS service page for Enterprise Agreement renewal negotiation.