Microsoft has announced that it will be increasing nonprofit pricing for selected Microsoft 365 and Office 365 licenses on July 1, 2026. This will apply to both new and existing customers.
Changes to Microsoft 365 and Office 365 Pricing
As of July 1, 2026, the cost per license of the following products will be updated according to the chart below. All prices listed are based on an annual commitment term and are paid annually. Pricing changes for month-to-month customers will be announced soon.
| Product | Current Cost per License per month | Cost per License Per Month Starting July 1, 2026 |
|---|---|---|
| Microsoft 365 Business Basic | $1 | No change |
| Microsoft 365 Business Standard | $3 | $3.50 |
| Microsoft 365 Business Premium (Above 10 licenses) | $5.50 | No change |
| Microsoft 365 Business Apps | $3 | $3.50 |
| Microsoft 365 E3 | $9 | $9.75 |
| Microsoft 365 E5 | $22.80 | $24 |
| Microsoft 365 F3 | $0.90 | TBD |
| Microsoft 365 F5 | $2.00 | $2.50 |
| Office 365 E1 | $2.50 | No change |
| Office 365 E3 | $5.75 | $6.50 |
| Office 365 E5 | $15.20 | $16.40 |
Why Are the Changes Happening?
According to Microsoft, it is increasing prices to reflect added value across its cloud platform. These pricing changes coincide with the rollout of new security, storage, and AI capabilities to improve protection, simplify IT management, and enhance productivity.
Customers will receive a 30-day advance notice in the Message Center before changes are applied to their environment.
Beginning on July 1, 2026, commercial pricing will increase, and nonprofit pricing will be adjusted accordingly, maintaining a fixed discount of 60 to 75 percent off the commercial rates.
What Does This Mean for Your Organization?
In short, if you use any of these affected products or are considering implementing them, the cost will increase, and we want to make sure that you can budget accordingly. For those of you who already have the affected licenses, pricing changes will be implemented at the date of your next subscription term renewal on or after July 1, 2026.
For example, if you just started an annual subscription on June 15, 2026, your price will not be impacted until June 16, 2027, upon your subscription term renewal. However, if it is a monthly subscription, your price will be impacted on July 16, 2026.
A few tips:
- Review the licenses you currently have to determine if or when you will be impacted by this change.
- If you have Office 365 E3 licenses and have fewer than 300 users, consider switching to Microsoft 365 Business Premium. It's available at a lower price than Office 365 E3 licenses, but it still offers the same enterprise-grade security features.
- If you plan to request licenses for the affected products for the first time, do so before July 1 and choose an annual subscription. This allows you to lock in the current pricing for your first subscription term.
Make Informed Decisions
Use the information above and the Microsoft FAQ page to understand how these pricing changes will affect your organization and what the best path forward is for you and your team.
You can also join us on Wednesday, June 10, at 10 a.m. Pacific time for a webinar in which we will discuss these price increases in detail and answer any questions you may have.
Top photo: Shutterstock
