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Microsoft to Raise Microsoft 365 Prices for Businesses and Governments in 2026

Microsoft

Business Honor
09 December, 2025

Price hikes for Microsoft 365 subscriptions globally, including Australian businesses, effective July 2026.

Microsoft has announced that it will raise the prices of its various Microsoft 365 software subscriptions for business, enterprise and government customers worldwide, effective from 1 July 2026. Australian organizations are also expected to be impacted by the global changes, although Microsoft has yet to confirm the exact price adjustments for the Australian market.

This move comes after Microsoft's personal subscription price in Australia was controversially raised last year, prompting an investigation by the ACCC. According to the ACCC, the company misled customers by failing to disclose less expensive plan alternatives when new AI features were being added, thus increasing the prices of subscriptions. This led to Microsoft having to refund money back to affected Australian consumers.

Nicole Herskowitz, Microsoft's corporate vice president for Microsoft 365, said that the changes in pricing reflect the company's continued investments in the platform, especially newer features enabled by AI. These include Copilot Chat, Copilot Agent Mode and new security tools. Microsoft would not detail how pricing will change in Australia, but in the U.S., business and enterprise plans will rise between 5% and 17%, while some frontline workers will see their prices go up as much as 33%.

These price increases will also reach government customers, with increases of between 5 and 13 percent for most government subscriptions. Microsoft has said the new prices reflect the value brought by these advanced AI features and security capabilities, which help customers be more productive, secure, and better manage their IT. Australian organizations will see price increases from mid-2026. This gives businesses ample time to change their budgeting and subscriptions.