Last updated: 3 July 2026
Microsoft’s commercial price increase for Microsoft 365 took effect on 1 July 2026. If you run a business on Microsoft 365, and most IT-dependent Perth businesses do, the question is no longer how to get ahead of the rise. It is whether you are paying the new rates for licences you actually use, and whether the features Microsoft bundled in alongside the increase let you cut spend elsewhere.
The good news is that Microsoft did not just raise prices. It bundled in security, AI, data governance, and device management features that previously cost extra. The bad news is that if you renew without a licence review, you will pay more without necessarily getting more value. Here is what changed and what to do about it now.
Microsoft announced these changes in December 2025. Pricing took effect on 1 July 2026 and packaging updates began rolling out in June 2026. The increases apply globally with local market adjustments. If your agreement renewed before 1 July, you keep your old rate until your next renewal. Every renewal from here on is at the new pricing, and month-to-month arrangements moved to the new rates immediately.
The changes for small and medium businesses:
| Plan | Previous (USD/user/month) | New (USD/user/month) | Change |
|---|---|---|---|
| Business Basic | $6.00 | $7.00 | +$1.00 (+17%) |
| Business Standard | $12.50 | $14.00 | +$1.50 (+12%) |
| Business Premium | $22.00 | $22.00 | No change |
| Office 365 E1 | $8.00 | $8.00 | No change |
| Office 365 E3 | $23.00 | $25.00 | +$2.00 (+9%) |
| Microsoft 365 E3 | $36.00 | $38.00 | +$2.00 (+6%) |
| Microsoft 365 E5 | $57.00 | $60.00 | +$3.00 (+5%) |
A note on Australian pricing: local AUD rates reflect Microsoft’s regional pricing model rather than a direct USD-to-AUD conversion, so the percentage increases above are the reliable guide. Your CSP or licensing provider can confirm the exact AUD rate on your specific plan and renewal date. Contact us if you want us to check yours.
The standout detail: Business Premium pricing did not change. For businesses that need the full security stack, and most businesses do, Business Premium just became the most cost-effective option relative to what is included.
Also worth noting: Microsoft doubled mailbox storage for Business Basic, Business Standard, and Business Premium from 50 GB to 100 GB per user. If your team has been bumping up against email storage limits, this is a welcome change bundled in at no extra cost.
Microsoft raised the security baseline across all plans. Features that previously required separate add-on purchases are now included in standard licences.
Microsoft Defender for Office 365 Plan 1 has been added to Office 365 E3 and Microsoft 365 E3. That means advanced anti-phishing, anti-malware, safe attachment scanning, and link protection is now part of the core licence. If your organisation is on E3 and still paying for a separate Defender add-on, that line item is now redundant. Cancelling it is one of the easiest ways to claw back the price rise.
URL checks in Outlook and Office apps have been added to Business Basic, Business Standard, and Office 365 E1. This protects users when they click links in emails and documents by checking them against known malicious websites.
With mandatory ransomware reporting now enforced in Australia, organisations that take cybersecurity seriously need every layer they can get. These changes reduce the gap between basic and premium security. But they do not eliminate it. Business Premium still includes Intune device management, Conditional Access, and Azure Information Protection that the lower tiers lack.
Microsoft is expanding what is included in its endpoint management tooling. For businesses on Microsoft 365 E3, new Intune capabilities including Remote Help, Advanced Analytics, and Intune Plan 2 features are being added. These tools help IT teams resolve device issues faster, detect problems before they become outages, and manage policies more effectively.
For E5 customers, Microsoft is going further with Endpoint Privilege Management, Enterprise Application Management, and Cloud PKI. These are serious tools for organisations that need to control who can do what on which device, and they are critical for compliance frameworks like the Essential Eight.
The rollout began in June 2026, with full availability expected by 1 August 2026. Tenants receive 30 days notice via Message Center before the new capabilities appear. If you have not seen them in your tenant yet, they are coming.
Microsoft is introducing a new Security + Intune bundle available as an add-on to Microsoft 365 E3 subscriptions. This bundle combines Microsoft Defender for Endpoint, Microsoft Defender for Office 365, Microsoft Purview Information Protection, and Microsoft Intune endpoint management into a single package.
Previously, getting this comprehensive security stack meant upgrading your entire organisation to E5. For a 50-person business, that is the difference between $1,900 and $3,000 per month. The new bundle gives E3 customers a middle path: enterprise-grade security without paying for every E5 feature.
Industry analysts estimate the Security + Intune bundle will sit between $12 and $15 per user per month on top of E3. That represents a potential 30 to 40 per cent saving compared to upgrading to E5. For organisations that need advanced security and data governance but do not use every E5 feature, this is worth a serious look at your next renewal.
Microsoft has confirmed that Security Copilot is included with all Microsoft 365 E5 subscriptions. Security Copilot is an AI-powered assistant that integrates into Microsoft Defender, Entra, Intune, and Purview. E5 customers receive 400 Security Compute Units per month for every 1,000 licenced users. Rollout is continuing across tenants over the coming months.
Microsoft 365 Copilot Chat, the AI assistant that works across Word, Excel, PowerPoint, Outlook, and OneNote, is now embedded across all Microsoft 365 plans. This is not the full Copilot licence (which still costs extra for advanced features), but it brings AI-powered summarisation, content generation, and calendar intelligence to every user.
For Perth businesses exploring AI adoption, this is a meaningful change. Your staff will have AI tools available whether you have a formal policy or not. That means you need governance in place. If you have not thought about this yet, a virtual CIO engagement can help you build an AI usage framework that protects your data while giving staff the tools to be more productive. And if you are weighing up the full Copilot licence against the alternatives, our ChatGPT vs Copilot vs Claude comparison covers the current pricing, including the $18 per user Copilot Business promotion running to December 2026.
With Business Basic and Business Standard both up while Business Premium holds steady, the maths has changed. Business Premium includes everything in Business Standard plus:
| Capability | Business Standard | Business Premium |
|---|---|---|
| Office desktop apps | Yes | Yes |
| Email and calendar | Yes (100 GB) | Yes (100 GB) |
| Teams | Yes | Yes |
| 1TB OneDrive | Yes | Yes |
| Defender for Office 365 | No (URL checks only) | Yes |
| Intune device management | No | Yes |
| Conditional Access | No | Yes |
| Azure Information Protection | No | Yes |
| Autopatch | No | Yes |
At the new pricing, Business Standard is $14 per user per month and Business Premium is $22. That $8 gap buys you a full security and device management stack. For most businesses with 20 or more staff, that is a far better investment than bolting on security products individually. If the price rise pushed your Business Standard bill up anyway, the upgrade case just got stronger.
Businesses that renewed before 1 July locked in the old pricing for their agreement term, in many cases through to mid-2027. If your renewal fell after 1 July, or you are on month-to-month, you are now paying the new rates. That is not a reason to do nothing. It is a reason to make sure every dollar of the increase is offset: redundant add-ons cancelled, unused licences removed, and each user on the right plan rather than the plan they were given three years ago. In our licence reviews, most businesses of 20+ staff find enough waste to cover the rise entirely.
Audit your current licences. Run a licence utilisation review. Most businesses have users on plans they do not fully use, or users who need features they do not have. Your IT provider should be able to run this audit for you.
Cancel add-ons the new bundles made redundant. With Defender for Office 365 now in E3 and Intune features expanding, check whether you are still paying separately for capabilities that are now included in your core licence.
Recost Business Premium and the E3 Security bundle. With Business Standard at $14 and Premium unchanged at $22, and the Security + Intune bundle giving E3 customers a middle path below E5, the plan that was right for you in 2025 may not be the right plan today.
Contact us on 1300 EPIC IT for a free Microsoft 365 licence review.
Microsoft 365 commercial pricing increased on 1 July 2026. The new prices apply at your next renewal after that date. Businesses that renewed before July locked in the previous rate for their agreement term, while month-to-month arrangements moved to the new rates immediately.
The USD increases are $1.00 to $3.00 per user per month depending on the plan, representing rises of 5 to 17 per cent. Business Premium and Office 365 E1 pricing did not change. Australian dollar rates follow Microsoft’s regional pricing model rather than a direct conversion, so confirm your exact AUD rate with your licensing provider.
For most Perth SMBs, Microsoft 365 Business Premium is the best value plan. It includes Intune device management, Defender for Office 365, Conditional Access, and Azure Information Protection, capabilities that would cost significantly more as add-ons. With Business Standard now at $14 and Business Premium unchanged at $22, the July 2026 pricing changes made Business Premium even more compelling.
Microsoft is introducing a Security + Intune bundle as an add-on for Microsoft 365 E3 customers. It combines Defender for Endpoint, Defender for Office 365, Purview Information Protection, and Intune endpoint management. This gives E3 customers access to enterprise-grade security without upgrading to E5, with analysts estimating $12 to $15 per user per month.
Microsoft added Defender for Office 365 Plan 1 to E3 licences, URL link checks to Business Basic, Business Standard, and E1, expanded Intune endpoint management tools to E3 and E5, Security Copilot (400 Security Compute Units per month per 1,000 users) to E5, and doubled mailbox storage (50 GB to 100 GB) for Business plans.
Microsoft Purview is a data governance and compliance platform that handles data classification, information protection, and compliance policy enforcement. It is particularly important for businesses in legal, healthcare, and finance that handle sensitive client data. With the July 2026 changes, Purview capabilities are bundled into new E3 add-on packages and E5 licences.
A managed IT services provider can audit your current licence usage, identify cost savings from redundant add-ons, recommend the right plan for each user, and manage renewals strategically. As a Microsoft Solutions Partner, Epic IT helps Perth businesses optimise their Microsoft 365 investment and ensure new security features are properly configured, not just provisioned.
