Microsoft is hiking prices of Microsoft 365 for businesses and government users

Microsoft 365 Prices Going Up for Business and Government Users

Written by: Supriya Kadu

Edited by: Pinky Deshmukh

Last Updated: December 05, 2025

Summary: Starting July 2026, Microsoft will raise subscription costs for its 365 productivity suite — particularly affecting smaller businesses and frontline-worker plans — citing new AI and security features.

Big changes are coming to how much companies pay for Microsoft 365. Starting next July, Microsoft will raise subscription fees for businesses and government customers across the board.

Smaller-biz plans will jump from $6 to $7 per user per month. Mid-tier business plans will go up too — and even “frontline worker” plans are seeing the steepest boost. Enterprise or larger plans will have a smaller increase, but it’s still a noticeable bump.

Why the hike? Microsoft says it’s adding a ton of new features: smarter AI tools, tighter security, better collaboration — improvements that are meant to help teams and organisations work more efficiently.

For businesses — especially small and medium ones — this means higher software costs from mid-2026 onwards. Organisations that rely on large numbers of licenses (say for frontline staff, retail workers, or field teams) will feel the impact more sharply.

At the same time, the justified upgrades, better security, AI-enabled tools, and regular updates offer improved productivity and compliance features, which many organisations value.