Microsoft's 2026 pricing and packaging update for Microsoft 365 took effect on 1 July 2026, and it works the way these updates always do: existing subscriptions stay on their current price until renewal. That one sentence is why this checklist stays relevant for a full year. Nobody's bill changed on 1 July. Everybody's bill changes at their next renewal, and those renewals are spread across the next 12 months. Whenever yours lands, the weeks before it are the one window where licensing decisions are cheap to make.
Frontrow covered the announcement itself at /insights/microsoft-365-price-increase-july-2026-australia. This piece is the other half: the checklist to work through before the renewal quote arrives, in the order that saves the most money. All prices below were checked against Microsoft's published lists in August 2026.
1. Know your new price before the quote tells you
The business suite changes are straightforward, in USD list prices per user per month, annual term (checked August 2026):
- Microsoft 365 Business Basic: US$6.00 to US$7.00.
- Microsoft 365 Business Standard: US$12.50 to US$14.00.
- Microsoft 365 Business Premium: unchanged at US$22.00.
Microsoft has paired the increases with packaging additions, including Copilot Chat enhancements and an extra 50GB of email storage on Business Basic and Business Standard. Australian invoices are set from Microsoft's AUD price list as it stands at your renewal, so the exact AUD figure depends on when your term rolls; ask your partner for the AUD number for your actual renewal month rather than working from a currency conversion.
Note what did not move: Business Premium. The plan most small businesses should be on for security reasons is the one that did not get more expensive, which changes the Standard-versus-Premium arithmetic. The gap was US$9.50; it is now US$8.00.
2. Audit seats before you renew, not after
A price rise on a licence nobody uses is pure waste, and every tenant Frontrow audits has some. Before renewal, pull the licence and usage picture and look for four things: licences still assigned to people who left, paid seats on shared or service mailboxes that could run unlicensed, users on Business Standard who only ever touch email and could sit on Business Basic, and duplicate add-ons already included in a bundled plan. On a 30-seat tenant it is common to find three to five seats of waste, which at the new prices funds most of the increase on the seats that remain.
Renewal is the moment this audit pays, because New Commerce Experience (NCE) annual terms only let seat counts go down at renewal. Cut after the term rolls and you carry the waste for another year. Frontrow's longer guides on this live at /insights/reduce-microsoft-365-costs-australia and /insights/m365-licence-optimisation-guide.
3. Price the new 'with Copilot' bundles against your stack
From 1 July 2026 Microsoft made two SMB bundles permanent SKUs rather than promotional offers, for organisations buying between one and 300 seats (USD list, checked August 2026):
- Microsoft 365 Business Standard with Copilot: US$23.50 per user per month.
- Microsoft 365 Business Premium with Copilot: US$32.00 per user per month.
Against the new base prices, the Copilot component works out at US$9.50 on Standard and US$10.00 on Premium, well under Copilot bought as a separate line item. Renewal is the natural moment to run this comparison for the subset of staff who would actually use Copilot daily: the bundle for the 10 people living in Outlook and Excel, the base plan for everyone else. It rarely makes sense tenant-wide on day one.
4. Check the promo windows before they close
Two sets of Copilot promotions are running through partners, with different expiry dates, and both are worth knowing about before signing a renewal (checked August 2026):
- Microsoft 365 Copilot promotions for the full US$30 Copilot licence, including 15 per cent off one-year terms for SMB and 15 per cent off three-year terms, run to 30 September 2026.
- Microsoft 365 Copilot Business, the SMB-focused Copilot licence, is around 15 per cent off at US$18 per user per month on an annual subscription, running to 31 December 2026.
- A Business Basic plus Copilot Business package is 25 per cent off at US$21 per user per month, also to 31 December 2026.
If a Copilot decision is on the table anyway, a renewal that lands inside a promo window is materially cheaper than the same decision three months later. If it is not on the table, do not let a discount put it there; an unused Copilot seat at 15 per cent off is still waste.
5. Choose the term deliberately: annual versus monthly
NCE gives you the choice at every renewal and it is worth making consciously. An annual term locks the price for 12 months and costs less; a monthly term carries roughly a 20 per cent premium for the right to reduce seats month to month. The pattern that works for most small businesses is a split: annual terms for the stable core headcount, a small pool of monthly-term seats for casuals, contractors and growth. Remember the asymmetry inside an annual term: seats can be added any time, but reduced only at renewal, outside the short cancellation window after purchase.
Also check your co-terming. Tenants accumulate subscriptions with scattered renewal dates, which means facing this checklist four times a year instead of once. Aligning end dates at this renewal makes every future renewal one decision instead of several.
The renewal-day checklist
- 1Confirm your renewal date and the AUD price for each SKU at that date, in writing, from your partner.
- 2Pull a licence report and remove leavers, unused seats and paid licences on mailboxes that could run unlicensed.
- 3Re-check plan fit per user: Basic for email-only users, Premium where its security stack is needed, Standard in between.
- 4Price the with-Copilot bundles for the users who would genuinely use Copilot, against base plan plus standalone licence.
- 5Check which Copilot promos are still open at your renewal date and whether a term inside the window saves real money.
- 6Set the term mix: annual for the stable core, monthly-term seats only where the flexibility is worth the premium.
- 7Co-term stray subscriptions so the next renewal is a single event.
- 8Diarise the next renewal 60 days out, because every one of these levers is cheapest before the term rolls.