Official source: Microsoft has published a full FAQ on the July 2026 pricing changes at microsoft.com/licensing/news/2026-m365-packaging-pricing-updates-faq. We recommend checking that page for the latest AUD pricing as it is confirmed closer to the deadline.

Microsoft 365 pricing changes are coming to Australia from 1 July 2026, and they affect every business on a commercial plan. Whether you are on Business Basic, Business Standard, Business Premium, or an Enterprise plan, your renewal costs are going up. If your subscription renews after 1 July, you will pay more unless you act before the deadline.

This post covers what is changing, why it is happening, and the specific steps you should take before 30 June to avoid paying more than necessary.

What About Microsoft 365 Copilot Pricing? Is That Changing Too?

Yes, and this is the second deadline that makes June 2026 so important for Australian businesses. Alongside the base plan price increases taking effect on 1 July, the promotional pricing for Microsoft 365 Copilot for Business closes on 30 June 2026.

Right now, Microsoft 365 Copilot for Business is available to Australian SMBs at AUD $33 per user per month as a standalone add-on, or bundled with Microsoft 365 Business Standard at approximately $32.90-$34 per user per month on the promotional rate. This is the lowest price this product will be available at. After 30 June, new subscribers will pay the standard (higher) rate.

What Does Copilot for Business Actually Give You?

Copilot for Business brings AI assistance directly into the Microsoft 365 apps your team uses every day. That includes drafting and summarising emails in Outlook, generating meeting notes and action items in Teams, creating and editing documents in Word, analysing data in Excel, and building presentations in PowerPoint. For businesses with up to 300 users, it is the most accessible entry point into AI-powered productivity available through Microsoft.

Should You Add Copilot Before June 30?

Whether Copilot for Business makes sense for your team depends on how your people currently work and what they spend most of their time on. The promotional pricing window creates a genuine cost incentive to act before the deadline, but buying a tool your team will not use is not a good investment at any price point.

Otto IT recommends doing a quick usage assessment before committing. If your team spends significant time on email management, document drafting, meeting follow-ups, or data analysis in Excel, Copilot for Business will likely deliver measurable time savings. If your workflows are primarily operational or field-based, the value case is less clear-cut.

For a detailed breakdown of what Copilot for Business costs across all bundle options, what is included at each price point, and how to decide whether the June 30 deadline is worth acting on, read our full guide: Microsoft 365 Copilot for Business: Pricing, Value and the June 30 Deadline for Australian SMBs.

What Are the Microsoft 365 Pricing Changes in Australia for 2026?

Microsoft is increasing commercial Microsoft 365 pricing across its full plan range for Australian businesses, effective 1 July 2026. The increases apply to both new subscriptions and existing subscribers renewing after that date.

The plans affected include:

• Microsoft 365 Business Basic
• Microsoft 365 Business Standard
• Microsoft 365 Business Premium
• Microsoft 365 Apps for Business
• Microsoft 365 E3 and E5 (Enterprise)

These increases are part of a broader global pricing adjustment Microsoft has been progressively rolling out through 2025 and 2026. The changes affect annual commitment pricing. If you are on monthly billing, your situation may differ, so it is worth checking your specific agreement.

Plan	Current price (USD)	New price from 1 July 2026 (USD)	Increase
Microsoft 365 Business Basic	$6.00/user/month (USD)	$7.00/user/month (USD)	+17%
Microsoft 365 Business Standard	$12.50/user/month (USD)	$14.00/user/month (USD)	+12%
Microsoft 365 Business Premium	$22.00/user/month (USD)	No change confirmed	—
Microsoft 365 E3	$36.00/user/month (USD)	$38.00/user/month (USD)	+6%
Microsoft 365 E5	$57.00/user/month (USD)	$60.00/user/month (USD)	+5%
Microsoft 365 F1	$2.25/user/month (USD)	$3.00/user/month (USD)	+33%
Microsoft 365 F3	$8.00/user/month (USD)	$10.00/user/month (USD)	+25%

All figures above are in USD (United States Dollars) as published by Microsoft. AUD pricing has not yet been officially confirmed. Contact Otto IT or your Microsoft licensing provider for an accurate AUD quote based on your specific plan and renewal date.

Otto IT recommends reviewing your current Microsoft 365 agreement now to understand exactly when your next renewal falls and what your post-July pricing will look like.

Why Is Microsoft Increasing Prices?

Is the Copilot integration driving the price rise?

Yes, in large part. Microsoft has been steadily embedding AI capabilities, particularly Microsoft Copilot, across the Microsoft 365 suite throughout 2025 and 2026. The pricing adjustment reflects the increased value and infrastructure cost of delivering AI-powered features at scale.

This is not the first time Microsoft has used capability upgrades to justify price increases. The 2022-2023 increases followed the introduction of Teams as a core platform feature. The pattern is consistent: when Microsoft significantly expands what a plan delivers, pricing tends to follow.

That said, the AI integration is moving faster than past feature rollouts. In our experience advising clients, many businesses are underutilising the features they already pay for. A price rise is a good forcing function to reassess whether your current plan still fits your actual usage.

Are these increases specific to Australia?

No. Microsoft is applying these adjustments globally, but Australian businesses have their own pricing tier and effective date. The 1 July 2026 date is the relevant deadline for Australian commercial customers. Microsoft last increased Australian M365 pricing in 2022-2023, so this represents the first major adjustment in roughly three years.

What Does This Mean for Australian Businesses?

Who is actually affected by the July 2026 changes?

Any Australian business on a commercial Microsoft 365 plan that renews on or after 1 July 2026 will be subject to the new pricing. This includes businesses renewing annual subscriptions, new customers signing up after the date, and businesses upgrading their plan tier.

If your annual subscription renews before 1 July 2026, your renewal will lock in at current pricing for another 12 months, giving you until mid-2027 before the increase hits.

What if we are on a monthly billing cycle?

Month-to-month pricing can behave differently depending on your agreement and whether you purchase direct or through a provider. Otto IT recommends checking with your licensing provider to confirm how and when the new rates will apply to your specific account.

How significant is the cost impact for a small business?

The per-user increase may look modest in isolation, but the impact compounds quickly. For a business with 30 users on Business Standard, even a moderate per-seat increase adds up to a meaningful annual cost shift. At 50 or more users, the difference becomes a line item worth planning for.

This is exactly why reviewing your headcount and actual usage now, rather than after auto-renewal, is the right move. You may find you are paying for seats or plan features you are not using.

There Are Two Pricing Deadlines Converging in June 2026

What is the second deadline businesses should know about?

There is a second deadline running alongside the general M365 price increase. The Microsoft 365 Copilot for Business promotional pricing, which is the SMB-focused Copilot SKU at a reduced rate, ends on 30 June 2026.

After 30 June, that promotional price is gone. Businesses that want Copilot for Business at the current rate need to act before the end of June.

This creates a situation where two pricing decisions converge at the same deadline:

• Lock in M365 base plan renewals before 1 July to avoid the general price increase
• Decide on Copilot for Business before 30 June to access the promotional pricing

For businesses that have been sitting on the fence about Copilot adoption, this is a genuine deadline rather than a marketing pressure tactic. The promotional pricing for the SMB SKU was always time-limited, and the window is now closing.

We have written a dedicated post on the Microsoft 365 Copilot for Business pricing and what Australian businesses need to know if you want to explore that side of the decision in more detail.

What Should Australian Businesses Do Before 30 June?

Step 1: Review your current M365 licenses and usage

Before you renew anything, look at what you are actually using. In our experience advising clients, it is common for businesses to have seats assigned to former staff, departments using a fraction of their licensed features, or plans that no longer match the team’s actual workflow.

A quick license audit before renewal can surface real savings. Your IT provider should be able to pull a usage report from the Microsoft Admin Centre.

Step 2: Check your renewal date

Log into your Microsoft 365 Admin Centre or ask your IT provider when your current subscription renews. If it falls before 1 July 2026, you may already be protected for another year. If it falls after 1 July, you need to decide whether to act now.

Step 3: Consider locking in your annual renewal early

If your subscription does not renew until later in 2026, it may be worth discussing with your provider whether early renewal is an option at current pricing. Not all licensing arrangements allow this, but it is worth asking.

Otto IT recommends having this conversation now rather than after the deadline passes. Once July arrives, the new rates apply.

Step 4: Assess whether a plan upgrade makes sense

The pricing increase also creates a natural point to reassess your plan tier. If you are currently on Business Basic but your team is increasingly using Teams, SharePoint, and security features, upgrading to Business Standard or Business Premium may deliver better value per dollar even at the new price.

Business Premium, in particular, includes Intune device management, Microsoft Defender for Business, and advanced identity protection features that many of our clients find worth the additional cost once they understand what is included. For businesses that have not reviewed their plan tier in a few years, this is a good moment to do so.

Step 5: Evaluate the Copilot for Business opportunity

The 30 June deadline on Copilot for Business promotional pricing means this decision cannot wait. If your business is considering AI tooling for productivity, drafting, summarisation, or meeting management, Copilot for Business is worth a genuine look before the promo window closes.

This is not a pitch to buy something you do not need. It is a genuine time-limited decision. If Copilot is on your roadmap for the next 12 months, buying in before 30 June is financially rational.

Step 6: Talk to your IT provider before auto-renewing

Auto-renewal at the new rate without a review is the worst outcome. You end up paying more for a plan that may no longer fit your business, without having explored your options.

Otto IT offers Microsoft 365 licencing reviews as part of our managed services. If you want to understand exactly what you are paying for, where you can optimise, and how the July changes affect your specific setup, we can walk you through it.

Learn more about our Microsoft 365 managed services for Australian businesses.

What About Enterprise Plans: E3 and E5?

Are the Enterprise plan increases worth paying attention to?

Yes, especially for mid-sized businesses in Australia that have grown into E3 or are considering it. The Enterprise plans carry a higher per-seat cost to begin with, so any percentage increase translates into a more significant dollar impact at scale.

Microsoft 365 E3 is the plan most commonly discussed among professional services firms with 50 or more staff. It includes advanced compliance, eDiscovery, Azure Active Directory Premium P1, and the full desktop Office suite. If your business is approaching that size or dealing with regulatory requirements around data retention or access control, E3 remains the most defensible choice from a compliance perspective.

Microsoft 365 E5 adds advanced security, analytics, and voice capabilities. In our experience advising clients, E5 is typically only worth the premium when businesses are actively using its security intelligence features or need the built-in telephony. Paying for E5 and using it like E3 is one of the most common sources of Microsoft licensing waste we see.

How should Enterprise customers prepare for the price changes?

The same principles apply as for SMB customers, but the stakes are higher. Enterprise agreements often have longer terms and more complex renewal structures. Otto IT recommends that any business on E3 or E5 should start the renewal conversation with their Microsoft partner at least 60 days before the current term ends.

For organisations managing 50 or more seats, the difference between an informed renewal and an auto-renewal at new rates can represent a material budget variance. It is worth the conversation now.

How Does This Fit Into a Broader Microsoft Strategy?

Is Microsoft likely to keep increasing prices beyond 2026?

In our experience following Microsoft’s commercial licensing strategy, the trajectory is toward higher prices tied to broader platform capabilities. The integration of AI across Microsoft 365, Teams, and the Power Platform is accelerating. Microsoft has been clear that Copilot is not an optional add-on in the long term; it is the direction the suite is moving.

Businesses that build their Microsoft 365 strategy around managing cost will need to get smarter about licence governance, usage monitoring, and plan selection over time. The era of setting up Microsoft 365 once and forgetting about it until renewal is over.

Should businesses consider alternatives to Microsoft 365?

For most professional services businesses in Australia, Microsoft 365 remains the default choice because of its depth of integration, familiarity, and compliance capabilities. Google Workspace is the main alternative, and it suits some business models well, but the switching cost for established Microsoft environments is real.

The more practical question is not whether to leave Microsoft, but how to get better value within the ecosystem. That is where licence reviews, plan selection, and Copilot adoption strategy become genuinely important.

Frequently Asked Questions

Does the 1 July 2026 price increase affect my existing subscription immediately?

No, the increase applies at your next renewal date after 1 July 2026. If your subscription renews before that date, your current pricing is locked in for another term. If your renewal falls after 1 July, the new pricing will apply at renewal.

Which Microsoft 365 plans are affected by the July 2026 pricing changes?

The changes affect the full commercial range, including Microsoft 365 Business Basic, Business Standard, Business Premium, Microsoft 365 Apps for Business, and Enterprise plans E3 and E5. Both new and renewing subscriptions are affected from 1 July.

Can I lock in current pricing by renewing early?

This depends on your licensing agreement and provider. Some agreements allow early renewal at current rates; others do not. Otto IT recommends contacting your Microsoft partner or IT provider now to understand your options before the deadline.

What happens to the Copilot for Business promotional pricing after 30 June?

The promotional SMB pricing for Microsoft 365 Copilot for Business ends on 30 June 2026. After that date, the standard commercial pricing applies. Businesses wanting to adopt Copilot at the promotional rate need to act before the end of June.

How do I know if I am overpaying for Microsoft 365?

The most common signs are unused licenses, staff on higher-tier plans than they need, or subscriptions that include features nobody is using. A license audit through the Microsoft Admin Centre, or with help from your IT provider, will surface any waste quickly. Otto IT offers this as part of our managed IT Support services.

Review Your Licenses Before the Deadline

The Microsoft 365 pricing changes in Australia from 1 July 2026 are real, and they affect every business on a commercial plan. The window to act at current pricing closes at the end of June. Waiting until auto-renewal means paying the new rates without having considered your options.

The right move now is to review your current licenses, check your renewal date, and have a conversation with your IT provider before the deadline. That conversation is free. Renewing without it could cost you.

Ready to review your Microsoft 365 licensing before the July price increase? Book a quick call with the Otto IT team and we will walk you through your options.

Or if you prefer to reach out first, contact us here.