Current Microsoft 365 License Prices
Checked September 30, 2026. Sources: Microsoft July 2026 commercial price list, Microsoft business plans and Google Workspace pricing. US USD list prices before tax; no introductory discounts. Annual commitment is not a cancellable monthly plan. Existing Microsoft contracts may retain previous prices until renewal.
| Plan with Teams | US list per user/month | Annual license per user | Important boundary |
|---|---|---|---|
| Microsoft 365 F1 | $3 | $36 | Restricted frontline rights; not a desktop Office replacement |
| Microsoft 365 F3 | $10 | $120 | Frontline eligibility and limited web/mobile rights; not desktop Office |
| Business Basic | $7 | $84 | Web/mobile apps; up to 300 users |
| Business Standard | $14 | $168 | Desktop Office; up to 300 users |
| Business Premium | $22 | $264 | Additional security/device controls; up to 300 users |
| Microsoft 365 E3 | $39 | $468 | Enterprise suite, distinct from Office 365 E3 |
| Microsoft 365 E5 | $60 | $720 | Additional enterprise capabilities, distinct from Office 365 E5 |
These commercial prices apply from July 1, 2026. Annual subscription terms, taxes, regional pricing and your renewal date matter. Existing contracted rates are not retroactively changed by this table.
Verified Previous Prices, Not Current Offers
Microsoft's official July 1, 2026 change table records earlier with-Teams list prices of $2.25 for F1, $8 for F3, $6 for Business Basic, $12.50 for Business Standard, $36 for Microsoft 365 E3 and $57 for Microsoft 365 E5. Those are historical baselines. The current comparison uses $3, $10, $7, $14, $39 and $60 respectively; Premium remains $22. An existing contract may retain its former rate until renewal.
Packaging Before Optimization
No-Teams annual Business Basic, Standard and Premium are $5.40, $10.79 and $18.79/user/month. With-Teams Standard with Copilot is $23.50 and Premium with Copilot is $32, paid yearly. Do not confuse the base plan, Copilot Chat and a work-grounded Copilot bundle.
F1 and F3 have restricted frontline eligibility and entitlements. Confirm the current Microsoft Product Terms before assignment. Neither is a blanket replacement for knowledge-worker E3/E5 licenses or full desktop Office. A Business plan is not an enterprise-wide substitute for more than 300 users.
Conditional Annual Cost Models
Hypothetical examples, not customer case studies. Formula: users × monthly-equivalent annual list price × 12. Alternatives assume each user is eligible and every required capability remains licensed. Figures exclude migration, support, add-ons, taxes and negotiated discounts; they are not promised savings.
| Illustrative allocation | Current annual licenses | Alternative annual licenses | Gross license difference |
|---|---|---|---|
| 250 E3 → 200 E3 + 50 eligible F3 | $117,000 | $99,600 | $17,400 |
| 500 E3 → 250 E3 + 150 eligible F3 + 100 eligible F1 | $234,000 | $138,600 | $95,400 |
| 1,000 E3 → 400 E3 + 400 eligible F3 + 200 eligible F1 | $468,000 | $242,400 | $225,600 |
| 500 E5 → 100 E5 + 300 E3 + 100 eligible F3 | $360,000 | $224,400 | $135,600 |
| 2,000 E5 → 200 E5 + 1,000 E3 + 800 eligible F3 | $1,440,000 | $708,000 | $732,000 |
The E3/F3 list-price difference is $29/user/month ($39 minus $10), or $348/year. Moving 200 genuinely eligible users would reduce base-license charges by $69,600/year before replacement capabilities and implementation costs. Removing necessary controls can make that alternative unsuitable.
Eight Practical License Review Steps
- Reconcile paid seats with active users and approved service accounts; do not assume a universal unused-seat percentage.
- Map users to desktop apps, mailbox, storage, identity and security requirements.
- Verify frontline eligibility and rights before considering F1/F3.
- Check whether an E5 capability is actively required before comparing E3 plus individually quoted add-ons.
- Review Power BI and other standalone licenses against actual suite entitlements; do not assume add-ons reproduce the whole E5 bundle.
- Review shared-mailbox licensing against Microsoft support rules, access-user licenses, archive and retention requirements.
- Compare annual commitments, renewal dates and reseller quotes on identical terms.
- Assign an owner to periodic license reviews; do not assume Microsoft automatically revokes unused licenses.
E3 vs E5: A Requirements Decision
Microsoft 365 E3 with Teams is $39/user/month and E5 is $60 on the stated annual basis. The $21 monthly difference is $252/year. For 600 users, that is $151,200/year in base licenses, but only if an E3 configuration meets every retained requirement. E5 capabilities span security, compliance, analytics and communications; an inexpensive security add-on is not automatically feature-equivalent.
Renewal and Negotiation
Ask for a written quote showing edition, Teams, AI entitlements, billing cadence, commitment, renewal price, add-ons and cancellation terms. Volume, nonprofit/education eligibility and negotiated discounts require a real eligible quote. There is no guaranteed discount or fiscal-year saving. Compare your current contract separately from the public July 2026 list-price change.
Continue with the Microsoft 365 pricing owner, Google Workspace comparison, SaaS audit tool, dated price history and price-change calculator.
Review Pricing Before Renewal
Compare published prices with your actual invoice and contract. This guide is a dated pricing reference, not a promise of real-time renewal alerts.
View current pricing →