Microsoft 365 price increase July 2026 — the Australian renewal guide

From 1 July 2026, Microsoft is lifting headline list prices on most Microsoft 365 and Office 365 plans. For Australian businesses the increase comes on top of the November 2025 removal of Enterprise Agreement volume discounts at Levels B, C and D, which alone added 6% to 12% to the effective unit cost depending on tenant size. Microsoft 365 Business Premium is the conspicuous exception. Its $22 per seat headline price is unchanged, which is the cleanest signal Microsoft has sent in years about which SKU it wants the Australian SMB and lower mid-market sitting on.

This is the position Frontrow is taking with clients between now and the next renewal cycle. The numbers below are the published US dollar list prices from Microsoft's pricing FAQ. Australian dollar prices typically follow the same percentage move once Microsoft confirms regional pricing closer to 1 July, with the usual 30 days of notice through the Message Center.

Plan-by-plan price changes from 1 July 2026

• Microsoft 365 E3: $36 → $39 per user per month, +8.3%. Microsoft Defender for Office 365 Plan 1 is now included, where previously it was a paid add-on.
• Microsoft 365 E5: $57 → $60 per user per month, +5.3%. Adds Security Copilot capacity (400 SCUs per 1,000 users, capped at 10,000 SCUs per month), Intune Endpoint Privilege Management, Microsoft Cloud PKI and Intune Enterprise Application Management.
• Office 365 E1: $10 → $11 per user per month, +10%.
• Office 365 E3: $23 → $26 per user per month, +13%.
• Microsoft 365 F1: $2.25 → $3 per user per month, +33.3%. The largest percentage move of any plan.
• Microsoft 365 F3: $8 → $10 per user per month, +25%.
• Microsoft 365 Business Basic: $6 → $7 per user per month, +16.7%. Mailbox storage doubles from 50 GB to 100 GB.
• Microsoft 365 Business Standard: $12.50 → $14 per user per month, +12%. Mailbox storage doubles from 50 GB to 100 GB.
• Microsoft 365 Business Premium: $22 per user per month, unchanged. Mailbox storage doubles from 50 GB to 100 GB.

The bigger story for Enterprise Agreement customers

The plan increases are the visible move. The bigger structural change is the November 2025 removal of automatic Enterprise Agreement volume discounts at Levels B (around 2,400+ users), C (around 6,000+ users) and D (around 15,000+ users). Historically those tiers attracted 6%, 9% and 12% off retail respectively. From November 2025, every organisation starts at Level A pricing with no automatic discount, and any concession has to be negotiated case by case.

Stack the EA discount removal on top of the July 2026 list rises and the effective increase for a large Australian enterprise can land between 15% and 23%, depending on the previous discount tier. For a 5,000-seat E3 estate that is a meaningful move on a single line item. For a 15,000-seat E5 estate it is the kind of number that the CFO will ask the IT team to model before the renewal, not after.

What is being added for the new price

The increases come with real value lifts, and these are worth being clear about with the board. E3 customers receive Defender for Office 365 Plan 1 inside the SKU. E5 customers receive Security Copilot capacity at a usable scale and the full Intune suite extension. All Business plans get the mailbox storage doubling. Across the stack, Intune Remote Help, Intune Advanced Analytics and Intune Plan 2 are being folded in. For tenants that were already pricing those add-ons separately the per-seat economics of the new bundle are often better than the old one. The net cost depends on how heavily the tenant was using the now-included pieces.

Australian dollar reality

Microsoft has not yet confirmed AUD list prices for the July 2026 cycle. The pattern in previous AU adjustments is that the percentage move mirrors the US dollar increase and lands within a few weeks of the global date. The historical AUD multiple on M365 retail sits in a 1.5× to 1.7× range against the US headline number, with GST on top for non-input-credit customers. A useful planning placeholder is to apply the published percentage increase to the current AUD invoice and reserve a small margin for FX. Final numbers will appear in Message Center 30 days before the change reaches each tenant's renewal.

Four moves worth making before the next renewal

• Audit current usage by SKU. The single most expensive habit Frontrow finds at renewal is paying for E5 features that nobody is using. Run an honest report on which E5-only capabilities are actually consumed (Defender for Endpoint P2, Defender for Identity, Microsoft Purview, Power BI Pro, audio conferencing). Where usage is thin, downgrade to E3 plus targeted add-ons and let the math reset.
• Re-test the Business Premium ceiling. Business Premium is unchanged in price, the mailbox grows to 100 GB, and the gap to entry-level Enterprise is narrower in feature terms than it was 18 months ago. For tenants under the 300-seat ceiling that bought E3 for one or two specific features, Business Premium plus a thin add-on usually models better.
• Reclaim seats on a quarterly cadence. The cheapest dollar saved is the seat that was assigned to a leaver and never deactivated. A quarterly reclaim loop tied to HR offboarding typically returns 8% to 15% of the seat count in mid-market tenants, and the return is permanent once the discipline is in place.
• Get the renewal date in front of the right people. Multi-year EA customers stay on current pricing until renewal after 1 July 2026. A renewal that lands in August is a different conversation from one that lands in February. Frontrow is asking clients to put the renewal date on the executive calendar this quarter and start the comparable-quote process three months out, not three weeks.

Frontrow runs the renewal modelling for Australian businesses every quarter, and the July 2026 cycle is the one where the mid-market should be running the numbers in May rather than June. Call 1300 012 466 or book a 30-minute renewal conversation through the contact page.