If you run retail floors, a kitchen, a ward roster or a factory shift, you have a population of staff who barely touch a desk but still need Teams, a roster, a payslip and the occasional document. Licensing them on a full E3 or Business Standard plan is expensive overkill. Microsoft sells two cheaper 'frontline' tiers for exactly this: Microsoft 365 F1 and F3. They look similar on a price list and are very different in practice.
This guide walks through what each SKU actually entitles a worker to, where the line sits between them, and which deskless roles we'd put on which plan. We've kept it Australian and current to 2026, including the price changes landing on 1 July.
What 'frontline' means in Microsoft's world
Frontline (the F SKUs) is Microsoft's term for deskless, shift-based and seasonal staff: the people who use a shared device or their phone, not a dedicated laptop. The plans are deliberately stripped back and are licensed per user with a per-tenant cap, so they're priced to sit under the desk-worker plans rather than alongside them.
The headline thing both F1 and F3 share, and the thing that surprises buyers most: neither plan includes the installable desktop Office apps. There is no full Word, Excel, Outlook or PowerPoint on a Windows PC under F1 or F3. If a role genuinely needs desktop Excel, it isn't a frontline role and you should be looking at Business Standard or E3 for that person.
Microsoft 365 F1: Teams-first, no real mailbox
F1 is the entry tier. Think of it as a communications and identity licence rather than a productivity suite. An F1 user gets Microsoft Entra identity, Teams, SharePoint and OneDrive access, Stream, and the frontline tools like Shifts, Tasks, Approvals and Viva Connections. They get web and mobile access to view documents, generally read-only for the core Office files.
The big catch with F1 is email. F1 does not grant mailbox usage rights. A mailbox may be provisioned behind the scenes, but the user isn't entitled to send and receive mail from it. So an F1 worker can be messaged in Teams all day, but they don't have a working work email address in the way most people expect. If a role needs to receive an email, F1 is the wrong SKU.
Microsoft 365 F3: a mailbox plus web and mobile Office
F3 is the step that makes a frontline worker self-sufficient. On top of everything F1 gives, an F3 user gets a 2 GB Exchange Online mailbox they can actually use through Outlook on the web and mobile, plus the web and mobile versions of Word, Excel, PowerPoint and OneNote so they can create and edit, not just read.
F3 also carries a heavier security and management baseline than F1, which matters for shared devices and BYOD on the floor. For most retail, hospitality and manufacturing employers, F3 is the realistic 'frontline standard' and F1 is reserved for the narrowest read-and-roster roles.
The differences that actually decide it
- Mailbox: F1 has no usable mailbox; F3 gives a 2 GB Exchange Online mailbox via Outlook web and mobile.
- Office apps: both exclude desktop Office; F1 is largely view-only on the web, F3 adds create/edit in web and mobile Office.
- Windows: neither F1 nor F3 includes Windows Enterprise licensing the way E3 does, so device OS licensing is a separate consideration.
- Roster and frontline tools: Shifts, Tasks, Approvals and Viva Connections are available on both, so the deciding factor is almost always email and document editing, not the frontline apps themselves.
Pricing and the July 2026 rise
Microsoft has announced commercial price increases effective 1 July 2026, and the frontline tier takes the biggest percentage hit of the whole stack. On the published USD list, F1 moves from about USD $2.25 to USD $3.00 per user per month (roughly a 33% jump), and F3 moves from about USD $8.00 to USD $10.00 per user per month (about 25%). For organisations that previously sat on a frontline volume discount that's also being removed, the effective increase can land well above 40%.
In Australian terms, expect F3 to sit broadly in the low-to-mid teens per user per month and F1 in the low single digits, ex GST, once the new pricing lands. Treat any specific figure here as indicative AUD list — confirm at purchase, because Microsoft sets AU regional pricing rather than a straight USD conversion, and your reseller or CSP agreement will carry the binding number.
Which deskless roles fit which SKU
The practical test we use is simple: does this person need to send and receive email, and do they need to create or edit documents? If the answer to both is no, F1 may be enough. If the answer to either is yes, they're an F3.
- Retail floor and checkout staff who clock in, read notices and message a manager in Teams: F1 can work, provided they genuinely never need email.
- Store and shift managers, duty managers, team leaders who send email and edit rosters or reports: F3.
- Hospitality wait and kitchen staff on shared devices: usually F1 for the floor, F3 for supervisors and anyone who handles supplier or roster email.
- Manufacturing line operators reading work instructions and safety notices: F1 for view-only roles; F3 for leading hands, quality and anyone logging into email.
What we'd actually do
We start by separating your people into 'desk' and 'deskless', then split the deskless group by the email-and-edit test above. The common mistake is putting an entire site on one SKU. The cheaper move is usually a mix: F1 for the true view-and-roster population, F3 for the supervisor layer, and a small number of Business Standard or E3 seats for the back-office staff who slipped into a frontline plan and quietly need desktop Excel.
With the 1 July rise in play, it's also worth checking your renewal date and term. Locking a longer term before the increase, or right-sizing the F1/F3 split at renewal, is where the saving sits. The licensing terms are strict on frontline eligibility and caps, so we'd document who qualifies as frontline before you commit, not after an audit asks.
None of this needs to be guesswork. A short seat-by-seat review against the email-and-edit test, mapped to current AU pricing on the day you buy, usually pays for itself on the first renewal.