Microsoft is set to implement a global price increase for its Microsoft 365 productivity suites, effective July 2026, targeting commercial and government customers. The company stated on Thursday that the price adjustments reflect the addition of more than 1,100 new features to the suite—including AI-driven productivity tools and enhanced integrated security—since the last major price change.
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The price hike will affect businesses and public sector agencies worldwide, with the sharpest increases hitting small business and frontline worker subscriptions. For small businesses, Microsoft 365 Business Basic will rise 16.7% to $7 per user per month, while Business Standard will climb 12% to $14. Subscriptions for frontline workers will see the steepest surge, with Microsoft 365 F1 moving from $2.25 to $3 (a 33.3% increase) and F3 from $8 to $10.
Enterprise plans will see smaller jumps, with Microsoft 365 E3 up 8.3% at $39 and E5 up 5.3% at $60. Government suites will follow a similar pricing path, with changes implemented based on local regulations.
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Microsoft is justifying the increases by citing significant feature improvements across its core applications (Word, Excel, PowerPoint) and other integrated services. The move comes as Microsoft pushes aggressively into the realm of AI-powered productivity, offering its Copilot AI assistant as a separate $30/month add-on and introducing new AI-centric bundles for small and medium businesses. This price adjustment occurs while the Microsoft 365 suite faces growing competition from Google’s rival productivity products. This latest change follows the last commercial Office price increase in 2022 and an earlier hike in consumer subscription rates this year, marking the first consumer increase in over a decade.
