Microsoft 365 Price Increase July 2026: What Solos Should Do

How much more you'll pay, plan by plan

Most solo freelancers sit on Business Basic at $6 or Business Standard at $12.50, and both go up on July 1: Basic to $7 (up 16 percent) and Standard to $14 (up 12 percent). Across all affected suites the increase runs from zero to about 43 percent, so check your own line, not the headline.

Here are the official monthly per-user list prices, before and after July 1, 2026 (Microsoft Licensing):

• Business Basic: $6.00 to $7.00 (up 16 percent)
• Business Standard: $12.50 to $14.00 (up 12 percent)
• Business Premium: stays at $22.00 (no change)
• Office 365 E3: $23.00 to $26.00 (up 13 percent)
• Microsoft 365 E3: $36.00 to $39.00 (up 8 percent)
• Microsoft 365 E5: $57.00 to $60.00 (up 5 percent)
• Frontline F1: $2.25 to $3.00 (up 33 percent)

On one Business Standard seat, the jump to $14 is $18 more per year. Trivial in isolation. That is also the trap. This is one line in a stack of tools that all creep up at the same time, the same pattern as the Loom and Atlassian price hike. Note too that these are list prices. If you buy through a partner or reseller your real number may differ, but the percentage move is the same.

The renew-before-1-July lever, in plain terms

Microsoft's FAQ is explicit: any customer with a renewal before July 1, 2026 can renew or upgrade and lock in today's pricing until their next renewal after that date. The new prices then apply at the next renewal after July 1, on both monthly and annual billing (Microsoft Licensing FAQ).

In practice, the lever works best on annual billing. Renewing now starts a fresh 12-month term at today's price, which pushes your increase out a full year. On month-to-month billing you have less cover, because your renewal comes every 30 days, so the new rate reaches you soon after July 1. If you are mid-term on a multi-year agreement, you stay at your current price until that term ends.

Two practical notes. Microsoft will send a 30-day notice in your Message Center before the change hits your tenant, so do not panic-buy on a rumor. And some partners are running promotional discounts on Copilot business bundles through June 30, 2026, which only matters if you were already going to buy Copilot (Microsoft Tech Community).

Personal and Family plans are a separate thing

If you pay for Microsoft 365 Personal or Family, this July increase does not touch you: consumer and education pricing sit outside the commercial update. You already took your hit in January 2025, when Microsoft raised both plans by $3 a month, its first consumer increase in 12 years (Microsoft 365 Blog).

After that change, Personal runs $99.99 a year or $9.99 a month, and Family runs $129.99 a year or $12.99 a month (Pureinfotech). Microsoft tied the rise to bundling Copilot into both plans. If you do not want the AI features, Microsoft kept Personal Classic and Family Classic plans without Copilot at the lower price, which is a quiet downgrade most people never noticed.

One caution for freelancers: Personal and Family licenses are for household, non-commercial use. If you bill clients, a Business plan is the correct license, even when the consumer plan looks cheaper.

Your options this week

You have five moves this week, and they stack: absorb the increase, switch to annual and renew now, drop unused seats, downgrade a tier, or leave for Google Workspace or free tools. Which one fits depends on how much of Microsoft 365 you actually open in a normal week.

• Absorb it. If Outlook, Word, and Excel are your daily tools, a 12 to 16 percent bump on one seat is small next to the cost and hassle of moving.
• Switch to annual and renew now. Lock today's rate for another year before July 1. The easiest win if you are staying put.
• Drop unused seats. Paying for two or three seats you set up "just in case"? Cut to the one you use.
• Downgrade a tier. On Business Standard but never opening the desktop apps? Business Basic at $7 covers web Office and email.
• Leave. If your real needs are email, a calendar, and a document editor, Google Workspace or a free stack can cover them.

Before you pick, see the whole bill, not one line. That is the point of auditing your SaaS stack: list every recurring tool, its renewal date, and the last time you opened it. Half the savings hide in seats and tiers you forgot you were paying for.

Google Workspace and free tools, honestly

Google Workspace Business Standard costs $14 per user per month on an annual plan, the exact sticker as Microsoft 365 Business Standard after July 1 (Name.com). On price alone, switching is a wash. The honest reason to move is fit with your clients' files, not a lower number on the invoice.

So switching to save money rarely pencils out at the same tier. Move for fit, not for the sticker. If your clients send .docx and .xlsx all day, staying on Microsoft avoids formatting fights. If you already live in Gmail and Docs, the change is easy and the published Workspace plans are on Google's pricing page (Google Workspace). And if your needs are genuinely light, a free email account plus a web document editor can carry a solo shop for a while. Match the tool to the work, the whole idea behind the solopreneur tool stack.

A simple decision framework

Run this in ten minutes. Open your Microsoft admin center, find your subscription's renewal date, and answer three questions in order. The answers map straight to one of the five moves, so you finish the week with a decision instead of a vague worry about a price change.

1. Do I open the desktop Office apps in a normal week? If no, downgrade to Business Basic or a web-only plan.
2. Is my renewal before July 1? If yes and I am staying, switch to annual and renew now to hold the current rate.
3. Am I paying for seats or tiers I do not use? If yes, cut them today, separate from the price change.

Microsoft 365 is a good product for plenty of solo operators, and per seat this increase is small. The mistake is not the $18 a year. It is letting every subscription tick up unnoticed while your client-work apps quietly overlap and double-charge you. The same math runs through the real cost of a Notion, Trello, and Slack stack, where the total grows because nobody checks the edges.

Microsoft 365 runs your email and documents, and you should keep it if it earns its seat. The overlap worth cutting sits elsewhere: the separate proposal tool, contract tool, invoicing tool, and file-sharing tool that all bill you every month. Delivvo folds those into one branded client portal, and payments run through your own gateway, so none of that money routes through a middleman. See how it works →