Microsoft 365 and Entra Price and Packaging Changes in 2026: The Dates, What Moves, and What to Check Before Your Renewal

Microsoft's licensing page states it plainly: pricing updates take effect 1 July 2026, and packaging updates began rolling out in June 2026 and completed by 1 August 2026, with at least 30 days of Message Center notice before the change reached each tenant. Both dates are behind us: about ten weeks and five weeks respectively.

The renewal rule is what most buyers get wrong. Microsoft says existing customers remain on current pricing until renewal, and that the new pricing applies at the next renewal after 1 July 2026, on both annual and monthly billing. There was a window before 1 July to renew early and hold the old price until your next renewal after that date. It is closed. Anything bought since 1 July is already at the new list price; everything you already hold flips on its own renewal day.

The first job is not a price comparison but a list of dates: every Microsoft subscription you hold, its term, its renewal date and its seat count. The wider set of Microsoft dates sits on the Microsoft deadlines hub, and a Microsoft 365 License Audit and Optimization produces that list with the assignment data you need to act on it.

These are the US commercial list prices per user per month Microsoft published for this update, old price first. Office 365 E1 did not change, at $10.00. Office 365 E3 went from $23.00 to $26.00 and Office 365 E5 from $38.00 to $41.00. Microsoft 365 E3 went from $36.00 to $39.00 and Microsoft 365 E5 from $57.00 to $60.00. Business Basic went from $6.00 to $7.00 and Business Standard from $12.50 to $14.00, while Business Premium did not change, at $22.00. Frontline moved hardest: Microsoft 365 F1 from $2.25 to $3.00 and F3 from $8.00 to $10.00. Standalones moved too: Windows E3 from $6.63 to $7.63, Enterprise Mobility + Security E3 from $10.60 to $12.00, Microsoft 365 Apps from $12.00 to $14.00.

One detail before you argue about percentages: the no-Teams versions rose by the same dollar amount as the Teams versions, which makes the percentage look far larger on a smaller base. Microsoft 365 F1 without Teams went from $1.75 to $2.50, which Microsoft's table shows as 43%, and it is the same seventy-five cents F1 with Teams took. Nonprofit and government lists changed on the same date; Microsoft states consumer and education pricing is not part of this update. If you are unsure which program you buy under, that is what a Microsoft Volume Licensing session is for.

Microsoft moved capability into the suites at the same time, and this is where money is recoverable. Office 365 E3 and Microsoft 365 E3 both gained Microsoft Defender for Office Plan 1. Microsoft 365 E3 also gained Intune Remote Help, Intune Advanced Analytics and Intune Plan 2, and Enterprise Mobility + Security E3 and E5 gained the same Intune additions. Microsoft 365 E5 gained, on top of the E3 additions, Microsoft Security Copilot, Intune Endpoint Privilege Management, Microsoft Cloud PKI and Intune Enterprise Application Management.

Smaller suites were not left out: Business Basic, Standard and Premium each gained 50 GB of additional email storage, and Basic and Standard gained URL time-of-click protection. Copilot Chat enhancements and Copilot Chat analytics went into nearly every suite. Windows E3 gained Quick Machine Recovery for commercial customers and post-quantum security APIs.

Read that against your add-on invoice. If you pay separately for Intune Plan 2, Remote Help, Advanced Analytics, Endpoint Privilege Management, Cloud PKI, Enterprise Application Management or Defender for Office Plan 1 on top of a suite that now includes them, you are paying twice until someone cancels the add-on at its own renewal. That is a common finding in a license review, and it is what the Microsoft 365 License Optimization Subscription catches monthly rather than annually.

Microsoft's price-change table lists two Entra lines. Entra Plan 1 went from $6.00 to $7.00 per user per month and Entra Plan 2 from $9.00 to $10.00. Microsoft's Entra pricing page now shows Entra ID P1 at $7.00 per user per month paid yearly and P2 at $10.00, consistent with the change having landed. The same page lists Microsoft Entra Suite at $12.00, Microsoft Entra ID Governance at $7.00, and Entra Internet Access and Entra Private Access at $5.00 each. There is a knock-on effect: Microsoft's enterprise security pricing page shows Entra Suite requires Entra ID P1, so the P1 increase raises the floor under the Suite too.

One thing we could not confirm. Microsoft's 1 July 2026 price-change table names Entra Plan 1 and Plan 2 only; Entra ID Governance does not appear on it. Its current $7.00 list price is published, but whether that figure changed on 1 July 2026 is not something we can verify from a Microsoft page, so we do not claim it did. If a quote says the Governance add-on rose on that date, ask which Microsoft page says so. For first-time scoping, the practical questions are on the Microsoft Entra ID Governance Implementation page.

Microsoft's enterprise security pricing page now lists Microsoft 365 E7 at $99.00 per user per month paid yearly, with a No Teams variant at $90.45, against Microsoft 365 E5 at $60.00 and E3 at $39.00. Microsoft's pricing FAQ adds a footnote that matters: E7's price is not changing as part of this update, but the packaging changes made to E5 also apply to E7. Independent licensing analysts report E7 reached general availability on 1 May 2026, bundling Microsoft 365 E5, Microsoft 365 Copilot, Agent 365 and the Entra Suite. Microsoft's own announcement post was not reachable from here, so treat that date as reported, not quoted.

The consolidation sits underneath. The July price list carries two lines shown with a new price and no previous price: Microsoft Defender Suite at $12.00 per user per month and Microsoft Purview Suite at $12.00. On Microsoft's security pricing page both require Microsoft 365 E3, or Office 365 E3 with Enterprise Mobility + Security E3, and Entra Suite sits alongside them at $12.00 requiring Entra ID P1. That gives an E3 customer a fork: keep assembling individual add-ons, step up to one or more $12.00 suites, or move to E5 or E7. It is arithmetic against your seat counts and renewal dates, and it is the work in a Microsoft 365 E7 Frontier Suite Readiness Assessment.

Microsoft's FAQ is explicit that the update does not apply to standalone Microsoft Teams or Copilot SKUs, so Copilot seat prices did not move on 1 July 2026. Two Copilot money items do carry 2026 dates.

Microsoft's Copilot pricing page currently shows the Microsoft 365 Copilot Business add-on at a promotional starting price of $18.00 per user per month paid yearly against an original starting price of $21.00, with the promotion stated as valid through 31 December 2026 — roughly sixteen weeks from now. The same page shows the billing-cadence gap: Microsoft 365 Business Premium with Copilot is $32.00 paid yearly and $38.40 on the monthly option.

Then there are Copilot Credits. Microsoft's Copilot Credits licensing guidance puts pay-as-you-go at $0.01 per Copilot Credit with prepaid volume tiers, and describes credits as pooling at tenant level across Copilot Cowork, Work IQ APIs, Copilot Studio agents, Dynamics 365 agents and Power Platform AI. We found no Microsoft page announcing a change to the per-credit rate with a 2026 effective date, so treat any claim of one as unverified. The shape of the charge is what matters for budgeting: credits are metered consumption billed by Microsoft — your charge, not a fixed quote line. Set budgets, alerts and hard caps in the Microsoft 365 admin center before you scale agents, and size seats against the evidence — the point of a Microsoft 365 Copilot Readiness Assessment.

Start with dates, not prices. List every subscription, its term, renewal date and seat count, then mark the renewals falling in the next two quarters — those are where a decision is still available to you.

Then pull the assigned-license report and read it against the packaging list above. Cancel or lapse the add-ons now inside the suite, and reclaim licenses from leavers and from accounts that have not signed in. Check whether you hold the Teams-included or no-Teams variant, since both moved by the same dollar amount. Only then is the upgrade-versus-add-on comparison worth running.

Timing is the part that bites. Under Microsoft's New Commerce terms for license-based subscriptions, the seat count only comes down inside the seven-day cancellation window that opens after a purchase, a renewal or a mid-term addition. Outside it the count is fixed until the next renewal, and subscriptions auto-renew with the same product, term, billing frequency and seat quantity unless someone changes them first. An audit finishing the week after your renewal saves nothing for a year; aim to finish 30 to 60 days before.

Finally, get a second pair of eyes on the number. Moving billing to another partner is a billing change rather than a migration: switching your Microsoft 365 CSP billing does not alter your subscriptions, your tenant or your prices. If you want the whole spend looked at, we run an independent second opinion on your IT spend.