Microsoft has confirmed global pricing changes for Microsoft 365 business and government plans, effective 1 July 2026. For most affected plans the increase sits in the 5 to 17 percent range, with some of the commercial tiers towards the higher end. Australian pricing will follow Microsoft’s regional model rather than a direct conversion of the USD list price, so the local AUD figures won’t move in lockstep with anything you might see quoted in US-focused coverage. The headline is straightforward enough: the cost of running on Microsoft 365 is going up, and it’s worth looking at your licensing mix now rather than discovering the impact at renewal.

The plans affected are Business Basic, Business Standard and the Enterprise tiers. Notably, Business Premium and Office 365 E1 are not changing — which matters, because Business Premium is already the best-value plan we recommend for most small and medium organisations once you factor in its built-in security and device management. If you’re currently on Business Standard and adding bits and pieces of security tooling on the side, the gap to Business Premium just narrowed further. Existing customers stay on current pricing until their next renewal after 1 July, so the change lands at different points across the year depending on when your annual term ticks over.

Microsoft’s framing is that the increase reflects a meaningful expansion of what’s bundled into the core plans — additional security capabilities, AI features, data governance and device management that previously sat behind separate add-ons. There’s truth to that. The honest read is that some of those capabilities are genuinely useful and some you’ll never touch, and the answer depends on the shape of your organisation. The risk is paying more for a richer plan when a different licensing mix would suit you better, or staying on the same plan when a step up would actually reduce your total spend by retiring add-ons.

Practically, two things are worth doing in the next month or two. Review your licensing mix per user — not every staff member needs the same plan, and the savings from rightsising users sitting on the wrong tier often outweighs the headline increase. And if you’re not already on annual commitment, work out whether locking in before your renewal date is the right call for your cash flow and headcount outlook. We’ll be working through every managed client’s licensing in the lead-up to 1 July, but if you’d like yours brought forward, our managed IT team is happy to prioritise it.