Microsoft has confirmed pricing changes across Microsoft 365 and Office 365 commercial plans, taking effect 1 July 2026. Depending on the plan, prices are going up between 5% and 33%, with Business Basic and the Frontline worker plans taking the biggest hits, as reported by Think Technology and confirmed in Pax8’s April APAC partner update. Existing customers stay on today’s prices until their next renewal, with at least 30 days’ notice.

What’s actually changing

The numbers that matter for most Australian SMBs: Business Basic goes up around 17%, Business Standard around 12%, and Business Premium largely holds steady. Enterprise plans (E3 and E5) rise 5–13%, and Frontline (F1 and F3) plans climb by 25–33%. Microsoft is sweetening the deal a little — Defender for Office 365 Plan 1 is now bundled into E3 plans (previously an add-on at around AU$3 per user per month), and Business Basic and Standard mailboxes jump from 50 GB to 100 GB.

Why this matters for Australian businesses

If you’re a 20-seat team on Business Basic, a 17% rise isn’t a rounding error — it’s real money, and it compounds every year. Frontline plans are worse: teams running F3 at scale (hospitality, retail, NFPs with large volunteer bases) are looking at a 25% jump without any obvious feature trade. The bundled Defender protection is genuinely useful if you’re on E3, but it doesn’t help the SMBs on Business Basic or Standard who’ll still want to add proper email security separately.

What to do before 1 July

Three practical moves. First, pull your renewal dates out of the Microsoft 365 admin centre. Any renewal between now and 30 June locks in today’s pricing for another 12 months — and you still get the new features when they roll out. Second, audit actual usage. Most SMBs we look at are paying for licences that nobody’s logged into for months; cleaning that up usually saves more than the price rise adds. Third, check whether your plan still fits. If you’re on Business Basic mainly for Teams and Exchange, the 100 GB mailbox bump may stretch your current licence further. If you’re on Frontline, have a hard look at whether those users need more than they’re getting.

Need a hand?

Our team helps Australian SMBs make sense of licensing changes like this every time Microsoft moves. If you want a quick review of your tenant — renewals, seat counts, and whether you’re on the right plan — our Microsoft 365 service page is the place to start. A 15-minute conversation usually pays for itself.