Microsoft Raising Prices for Microsoft 365 Business Licenses

Microsoft recently announced it will increase monthly pricing by 5% for Microsoft 365 Business licenses, which include Apps for business, Basic, Standard and Premium.

However, there is a way to avoid the price increase altogether.

Let’s break down the details, including when this price hike takes effect and what you can expect to pay.

Important Dates and Details

Start date: Beginning April 1, if you renew your Business licenses with an annual commitment paid monthly, you’ll see a 5% increase.

Plan	Current $ (per user/month)	New $ (per user/month)	Increase
Apps for business	$8.25	$8.66	$0.41
Basic	$6.00	$6.30	$0.30
Standard	$12.50	$13.13	$0.63
Premium	$22.00	$23.10	$1.10

Renewal timing: If your renewal date falls before April 1, you won’t see the price increase until your next renewal cycle. For example, a March 2025 renewal means no price increase until March 2026.
Prepaid annual option: If you switch to fully prepaid annual billing, you avoid the 5% increase. For example, you will pay $2,640 ($22 * 10 licenses * 12 months) upfront for one year of 10 Premium licenses, whereas you’d pay $2,772 ($23.10 * 10 licenses * 12 months) for one year of 10 Premium licenses if you paid monthly.

We understand that many small businesses will agree the 5% increase to their monthly payments is worth it to avoid a large upfront payment. If the large yearly payment works within your budget then, by all means, take advantage.

If you’re lucky enough to have a renewal date before April 1, then you can continue paying monthly with no increase. However, you’ll see an increase in 2026 if you plan to keep paying monthly.