If you run Microsoft 365 at work, your subscription is about to look a little different. From 1 July 2026, Microsoft is rolling out the biggest pricing and packaging shake-up to its commercial plans in years, and a fresh wave of features is already landing in customer tenants.
Microsoft confirmed the changes back in December 2025, and we are now close enough to the cutover that it is worth a stocktake. The short version: it is a mixed bag. Some plans are going up, one popular plan is staying put with extra features tacked on for free, and Cloud PCs just got cheaper. Here is what Australian business owners and office managers need to know.
Most Microsoft 365 plans are going up between 5 and 17 per cent
From 1 July, Microsoft is lifting global commercial pricing across most of its subscription suites. Affected plans include Microsoft 365 Business Basic, Business Standard, the Enterprise tiers E3 and E5, Frontline, and standalones like Windows and EMS. Microsoft says most increases sit between 5 and 17 per cent, with a wider band of up to 33 per cent across some of the broader product set.
USD list prices are confirmed. Australian dollar pricing has not been officially published yet and will be adjusted regionally, but expect AUD figures to track the USD increases reasonably closely.
For existing customers the new prices kick in at your next renewal after 1 July 2026. New customers pay the new rates from day one. If you are mid-term on an annual subscription, you have a small window to lock things in before renewal.
Business Premium is the standout: same price, more value
Microsoft 365 Business Premium is the exception to the price rise. Its price is staying put, and Microsoft is bundling in a stack of new capabilities at no extra cost, rolling out between June and August 2026.
What is being added:
- Mailbox storage doubles from 50 GB to 100 GB per user, which also lands on Basic and Standard
- Copilot Chat enhancements across Word, Excel, PowerPoint, Outlook and OneNote, plus new admin controls and Chat Analytics
- Microsoft Defender for Office 365 Plan 1 for stronger email threat protection
- Intune Remote Help, so IT can support staff devices remotely
- Advanced Analytics for usage reporting
If you are on Business Standard and have been weighing up the jump to Premium, the maths just changed. With Standard going up and Premium holding steady while adding security and AI features, the gap between the two has narrowed sharply.
A quick note for our managed clients: Business Premium is what we already roll out as standard across the businesses we look after. If you are with us, you are on the plan that is not going up. You will just see more landing in your tenant over the next few months at no extra cost.
Windows 365 Cloud PCs are now 20 per cent cheaper
This one happened on 1 May 2026 and is worth mentioning. Microsoft cut Windows 365 Business list prices by 20 per cent, aimed squarely at making Cloud PCs more affordable for small and medium businesses.
The catch: from the same date, Cloud PCs hibernate one hour after a user disconnects. Reconnect within the hour and nothing changes. Come back after that and there is a short delay while the machine resumes. Performance is unaffected once you are back in.
For businesses that have been curious about Cloud PCs but baulked at the cost, this is the moment to take another look.
Three things to check before 1 July
- Audit your current plans. Know exactly which Microsoft 365 plans your staff are on, how many licences, and your renewal date.
- Re-evaluate Business Standard against Premium. With the price spread narrowing, Premium may now be the better value, especially for businesses that need the added security and Copilot tools.
- Talk to your IT provider before renewal. A short conversation now could save you a chunk on your annual licensing bill and make sure you are on the right plan for what you actually use.
Need help reviewing your Microsoft licensing before the July changes hit? Coast IT can go through it with you. Have a look at how we look after Microsoft 365, or get in touch.