Microsoft 365 (formerly Office 365) is the productivity suite for businesses that need Word, Excel, PowerPoint, and Outlook. It includes email, cloud storage, and collaboration tools. But the pricing can be confusing, especially with multiple business plans that include different features.

Here’s what Microsoft 365 actually costs in 2026 and which plan makes sense for your business.

📅 Pricing last verified: August 2026. We check and update pricing quarterly. If you notice a change, email us.

Microsoft 365 Business Plans (2026)

Plan	Annual (per user/mo)	Monthly (per user/mo)
Business Basic	$6	$7.20
Business Standard	$12.50	$15
Business Premium	$22	$26.40
Apps for Business	$8.25	$9.90

All plans include a 1-month free trial. Annual billing saves roughly 17% over month-to-month.

Business Basic: $6-7.20/user/month

The entry-level plan for businesses that need email and collaboration without desktop Office apps.

What you get:

• Email with 50 GB mailbox (you@yourbusiness.com)
• 1 TB OneDrive storage per user
• Microsoft Teams (chat, video, collaboration)
• Web versions of Word, Excel, PowerPoint, Outlook
• SharePoint and OneDrive
• 1 TB SharePoint storage per organization
• 24/7 support

What’s limited:

• No desktop Office apps (Word, Excel, PowerPoint)
• Web and mobile versions only
• Limited Teams features (no webinars, no phone system)
• No advanced security features
• No compliance tools

Best for: Small businesses (1-10 people) that need email and collaboration but don’t need desktop Office apps. Good for startups that use Google Docs or other tools for document editing.

Business Standard: $12.50-15/user/month

The most popular plan for businesses that need desktop Office apps.

What you get beyond Basic:

• Desktop Office apps (Word, Excel, PowerPoint, Outlook, Access, Publisher)
• Webinar hosting in Teams
• Teams phone system (add-on)
• Advanced collaboration tools
• Loop (collaborative workspaces)

What’s still limited:

• No advanced security features
• No compliance tools
• No advanced threat protection
• No data loss prevention (DLP)

Best for: Growing businesses (10-100 people) that need desktop Office apps and full Teams features. Good for most small to mid-size businesses.

Business Premium: $22-26.40/user/month

The business plan for larger teams that need security and compliance.

What you get beyond Standard:

• Advanced security (Microsoft Defender, threat protection)
• Compliance tools (DLP, information protection, eDiscovery)
• Advanced endpoint management
• Azure Information Protection
• Intune (device management)
• Advanced identity and access management

What’s still limited:

• No unlimited OneDrive storage
• No advanced compliance (requires E5)
• Limited phone system features

Best for: Larger businesses (100-500 people) that need security, compliance, and device management. Good for regulated industries.

Apps for Business: $8.25-9.90/user/month

The plan for businesses that only need Office apps without email.

What you get:

• Desktop Office apps (Word, Excel, PowerPoint, Outlook, Access, Publisher)
• 1 TB OneDrive storage per user
• Web versions of Office apps
• No email or Teams

Best for: Businesses that already have email (e.g., through Google Workspace) but need desktop Office apps.

The Real Cost: A Worked Example

Let’s say you have a 15-person team on the Business Standard plan.

Business Standard cost:

• 15 users x $12.50/month (annual) = $187.50/month
• Annual: $2,250

Same team on Business Premium:

Business Premium cost:

• 15 users x $22/month (annual) = $330/month
• Annual: $3,960

The Business Premium plan costs $1,710 more per year. You get advanced security, compliance tools, and device management. If you need those features, the upgrade is worth it.

Hidden Costs to Watch

OneDrive storage is per user, not pooled. Each user gets 1 TB (or unlimited on some plans). You can’t share storage between users.

Teams phone system is an add-on. If you need a business phone number in Teams, it costs extra ($8-15/user/month).

Desktop apps are Standard and above. If you need Word, Excel, and PowerPoint on your computer, you need Business Standard or higher.

Compliance tools are Premium and above. If you need DLP, information protection, or eDiscovery, you need Business Premium or higher.

Annual commitment. Annual plans require a 12-month commitment. You can’t cancel mid-year without paying the remaining balance.

How Microsoft 365 Compares

If you’re comparing productivity suites, Microsoft 365 is the main alternative to Google Workspace. Microsoft 365 has better Office compatibility and more features. Google Workspace is simpler and more collaborative.

For email only, Zoho Mail is cheaper. For video conferencing, Zoom is better. For cloud storage, Dropbox or Box may be better fits.

For accountants and professional services, Microsoft 365 is the standard for document creation and collaboration. Excel is essential for financial analysis and reporting.

Which Plan Should You Pick?

Choose Business Basic ($6-7.20/user/mo) if:

• You have 1-10 users
• You only need email and web-based Office apps
• You don’t need desktop apps

Choose Business Standard ($12.50-15/user/mo) if:

• You have 10-100 users
• You need desktop Office apps
• You want full Teams features

Choose Business Premium ($22-26.40/user/mo) if:

• You need advanced security and compliance
• You need device management (Intune)
• You have 100-500 users

Choose Apps for Business ($8.25-9.90/user/mo) if:

• You only need Office apps (no email)
• You already have email through another provider

For most small businesses, Business Standard is the right starting point. Upgrade to Business Premium when you need security and compliance features.

Related Reading

• Google Workspace Pricing 2026
• Slack vs Microsoft Teams 2026
• Zoom Pricing 2026

FAQ

Does Microsoft 365 offer a free trial? Yes. Microsoft 365 offers a 1-month free trial on all business plans. You can test the features before committing.

Can I switch plans later? Yes. You can upgrade or downgrade at any time. Upgrades take effect immediately, and downgrades take effect at the end of your billing cycle.

What is Microsoft Teams? Microsoft Teams is the chat, video, and collaboration platform included with all Microsoft 365 plans. It’s the alternative to Slack and Zoom.

Is Microsoft 365 HIPAA compliant? Yes, but only on Business Premium and Enterprise plans with a signed Business Associate Agreement (BAA). Business Basic and Standard are not HIPAA compliant.

How does Microsoft 365 compare to Google Workspace? Microsoft 365 has better Office compatibility and more features. Google Workspace is simpler and more collaborative. See our Microsoft 365 vs Google Workspace comparison for details.