Microsoft 365 prices went up in July 2026. What to check before you renew

Microsoft’s new Microsoft 365 pricing took effect on 1 July 2026. It covers most Business and Enterprise plans, and it arrived alongside more AI features built into the platform.

If your subscription hasn’t renewed since then, you haven’t paid the new price yet. You will at your next renewal. That makes now the time to look at what you’re paying for.

What changed

Most Microsoft 365 plans rose between 5% and 33%, depending on the licence. The table below uses Microsoft’s Australian retail list pricing as a reference.

Plan	Old RRP*	Change	Approx. new**
Business Basic	$9.00	~+16%	~$10.44
Business Standard	$18.70	~+12%	~$20.94
Business Premium	$32.90	No change	$32.90
Microsoft 365 E3	$56.80	~+8%	~$61.35
Microsoft 365 E5	$85.30	~+5%	~$89.57

*Microsoft Australian retail list pricing (ex GST) before 1 July 2026, based on an annual commitment. **Approximate, based on Microsoft’s published percentage increases. Your price may vary with billing model, agreement and renewal timing.

The new pricing applies at each organisation’s first renewal after 1 July 2026. It didn’t hit everyone on the same day. A business that renewed in June is still on the old price until mid-2027. One that renews in November pays more from November.

The AI question: Copilot Chat vs full Copilot

Microsoft has built more AI into Microsoft 365. The part that trips people up is the difference between the AI that’s included and the full paid Copilot licence.

The key clarification: Most Microsoft 365 business plans include Copilot Chat for baseline AI assistance. The full Microsoft 365 Copilot experience is a separate paid licence and is not automatically included with standard plans.

What’s included: Copilot Chat

Copilot Chat is a secure AI assistant for everyday tasks. Think of it as a practical way in, not the full experience. It covers:

General AI chat for work. Asking questions, brainstorming, rewriting text, summarising content you give it, and drafting responses.
Writing support. Turning rough notes into clear wording, improving tone, and simplifying content.
Access inside familiar Microsoft apps. Available through Microsoft 365, depending on rollout and how your account is set up.
A low-cost first step into AI. You can use it without licensing every user for full Copilot.

What needs the full Microsoft 365 Copilot licence

The paid licence works across your business data and the Microsoft 365 apps:

AI that draws on your own data. Emails, files, meetings, calendars, Teams, SharePoint and OneDrive, limited to what each user is allowed to see.
Advanced Outlook help. Summarising threads, drafting replies with context, and clearing the inbox faster.
Document and proposal creation. Word documents, reports and client-ready content that use what your business already has on file.
Meeting productivity. Summaries, key points and follow-ups, where the licensing conditions are met.
PowerPoint and Excel support. Building presentations, analysing spreadsheets, and turning data into something usable.

Side by side

AI capability	Copilot Chat	Full Copilot
General AI chat	Included	Included
Drafting & rewriting	Basic	Advanced + context
Access to emails, files, meetings & Teams	Not automatic	By permission
Meeting summaries & actions	Limited	With right licence
Doc, slide & spreadsheet workflows	Limited	Yes

Copilot availability and features can vary with licence, account configuration, app rollout, and whether the user holds the full Microsoft 365 Copilot licence.

What this means in practice

Your team will see AI tools whether you planned for them or not. They now sit inside the apps people already use.
Included AI is not the same as full Copilot. Copilot Chat is useful, but the full experience needs separate licensing.
Business Premium stands out on value. Its price didn’t move, and it includes security features the cheaper plans leave out.
Many businesses are paying for the wrong licences. Users often sit on a plan that doesn’t match their role or how they work.

What to check before you renew

Find your renewal date. That’s the day the new price starts for you.
List who has which licence, and whether they use what it includes.
Look for users who are over-licensed or under-licensed.
Decide whether Copilot Chat is enough, or whether a few people would get real value from full Copilot.

A licence review before renewal is the simplest way to avoid paying more than you need to. It also puts the right tools in front of the right people. If you’re on Business Basic or Standard, compare the new price with Business Premium while you’re there. The gap is smaller than it used to be.