Microsoft 365 Price Increases Coming July 2026 – What Australian Businesses Need to Know
Microsoft has announced its latest round of pricing and packaging updates for Microsoft 365 and Office 365, taking effect July 1, 2026. If your business runs on Microsoft’s cloud platform – and most Australian businesses do – here’s what’s changing, what it’ll cost you, and what you’re getting in return.
The Short Version
Almost every Microsoft 365 and Office 365 plan is going up in price. Increases range from 5% to 33% depending on the plan. The biggest jumps are on Frontline worker plans and Business Basic. Enterprise plans see more modest increases. On the upside, Microsoft is bundling in additional security and AI features that were previously sold separately.
Existing customers will stay on their current pricing until their next renewal, and Microsoft has committed to giving at least 30 days’ notice before any changes take effect on your account.
Business Plans
These are the plans most of our SMB clients are on.
What’s being added to Business plans: An extra 50GB of email storage (taking mailboxes to 100GB on Basic and Standard), URL time-of-click protection for safer email links, and Copilot Chat enhancements with analytics.
Enterprise Plans
For larger organisations on Enterprise licensing (Teams included).
What’s being added to Enterprise plans: Microsoft Defender for Office 365 Plan 1 is now included in E3 plans (previously a paid add-on). E3 also picks up Intune Remote Help, Intune Advanced Analytics, and Intune Plan 2. E5 plans get all of that plus Microsoft Security Copilot, Intune Endpoint Privilege Management, Microsoft Cloud PKI, and Intune Enterprise Application Management. All Enterprise plans gain Copilot Chat enhancements and Copilot Chat Analytics.
Frontline Worker Plans
Frontline plans see the steepest percentage increases, though they remain the lowest-cost plans per user (Teams included).
What’s being added to Frontline plans: Copilot Chat enhancements and Copilot Chat Analytics.
Standalone Components – Key Changes
What’s Actually New in These Plans
Microsoft is justifying the price increases by rolling new features into existing plans. Here’s a summary of the most significant additions:
- Copilot Chat enhancements and Analytics – Added to virtually every plan. This gives all users improved AI-powered chat capabilities and usage analytics for administrators.
- Microsoft Defender for Office 365 Plan 1 – Previously a paid add-on (around AU$3/user/month), now included in Office 365 E3 and Microsoft 365 E3. This adds safe attachments, safe links, and anti-phishing protection.
- Intune Plan 2, Remote Help, and Advanced Analytics – Added to Microsoft 365 E3 and EMS E3. Significant value for businesses managing devices through Intune.
- Microsoft Security Copilot – Added to Microsoft 365 E5. AI-powered security analysis that was previously a separate purchase.
- 50GB additional email storage – Business Basic and Business Standard mailboxes go from 50GB to 100GB.
- URL time-of-click protection – Added to Business Basic, Business Standard, and Office 365 E1. Scans links in emails at the moment you click them, not just when they arrive.
What This Means for Your Business
Let’s put the numbers in perspective. For a business with 20 users on Microsoft 365 Business Standard, the increase works out to roughly AU$2.24 per user per month – or about AU$538 per year across the whole team. Not insignificant, but not catastrophic either.
The inclusion of Defender for Office 365 in E3 plans is genuinely good news for businesses currently paying for it as an add-on – you may actually see a net saving. Similarly, the Intune additions to E3 plans could offset the cost if you’re currently licensing those features separately.
What you should do now:
- Check your renewal date. You won’t be affected until your next renewal after July 1, 2026. Log into the Microsoft 365 Admin Centre and check when your current agreement expires.
- Review your current plan. With new security features being rolled into lower-tier plans, it might make sense to shift users between plans. For example, if you’re on E5 primarily for Defender features that are now in E3, you could potentially downgrade and save.
- Audit your licences. Now is a good time to check whether you have unused or underused licences. Trimming a few seats before the price increase hits can offset the impact.
- Talk to us. We can review your current Microsoft 365 setup, identify any opportunities to optimise your licensing, and make sure you’re getting the best value before the new pricing kicks in.
Need Help Navigating These Changes?
If you’re unsure how these changes affect your business, or you’d like us to review your current licensing to find savings before the new prices take effect, get in touch. We’ll walk you through your options and help you make the right call.
Call us on 1300 920 866 or book a free consultation.
Percentage increases shown are based on Microsoft’s announced changes. Final Australian pricing will be confirmed by Microsoft closer to July 1, 2026. Standalone Microsoft Teams and Copilot SKUs are not affected by this update.
