Your Microsoft 365 renewal after the price rise: the questions to ask

The Microsoft 365 price increase took effect on 1 July 2026, but almost nobody felt it that day. It arrives at your renewal, which means a steady stream of businesses are meeting it for the first time this autumn, usually about a fortnight before they have to commit.

In short: The increase applies from your next renewal rather than the announcement date, and it is not uniform: reported rises run from around 5 percent to a third depending on plan, with Business Basic and Business Standard among the harder hit and Business Premium held flat. That last detail matters, because the gap between Standard and Premium has narrowed, and Premium carries the security tooling most businesses are buying separately. Before you renew, count who is actually using what, check whether the Premium comparison now works in your favour, and decide the term deliberately rather than accepting the default.

The increase is not evenly spread

The single most common mistake is treating this as one percentage applied to the whole bill. It is not, and the variation is what creates the opportunity.

Business Premium holding flat while the plans beneath it rise changes the arithmetic that a lot of organisations settled years ago. If you are on Business Standard and buying third party tooling for email security, device management or conditional access, you may now be paying twice for capability that is bundled a tier up. That comparison was often marginal before. For some estates it no longer is.

The honest caveat: this only works if you would actually use what Premium adds. Intune and Entra ID P1 sat unused are not a saving, they are shelfware with a better name. We wrote about that failure mode in the licences nobody is using.

Count before you renew

Renewals get processed on last year's numbers because there is rarely time to do anything else. That is where the money leaks.

• Pull actual usage, not headcount. The Microsoft 365 admin centre reports last activity per service. Look for accounts with no sign in for 60 days, and for people licensed for services they have never opened.
• Find the leavers. Licences assigned to departed staff are the most common single overspend we find, particularly where offboarding removes access but leaves the subscription attached.
• Check for stacking. Users holding both a bundled plan and a standalone add on that duplicates part of it, usually because the add on predates the bundle.
• Separate the shared and the occasional. Front line and shared device workers are frequently on full licences when a lighter plan fits how they work.

The questions worth asking before you sign

Take these to whoever handles your agreement. The answers determine whether you absorb the increase or offset it.

• What exactly is my renewal date, and what is the true up window? You cannot plan around a date you have not confirmed, and it is rarely the date people assume.
• What is the price on each plan I hold, before and after? Ask for the line by line, not the total. That is how you spot which seats are worth moving.
• What does moving these users to Business Premium cost, net of what we would stop buying elsewhere? This is the calculation most often skipped, because it crosses two budgets.
• What is the term, and what does committing longer actually save? A longer commitment can hold pricing, but it also removes your ability to shed seats. Know the trade rather than defaulting.
• Can seat count come down at renewal? For most agreement types the renewal is the moment you can reduce. Miss it and you carry the excess for another year.

Do not let the security decision follow the price

There is a version of this exercise that saves money and quietly makes you less safe: dropping to a cheaper plan and shedding the security features with it. That looks like a win on the renewal and shows up later as an incident.

If the budget genuinely has to come down, take it out of unused seats, duplicate tooling and over specified plans, in that order. Take it out of MFA coverage, device compliance or email protection last, and only with the risk written down and accepted by someone senior. Our Microsoft 365 security posture assessment is a quick way to see what you would actually be giving up.

The realistic outcome

Most organisations we take through this land in the same place: a modest net increase rather than the headline one, funded largely by seats nobody was using and one piece of duplicate tooling. That is a better result than it sounds, because it is repeatable. The count you do this year makes next year's renewal a much shorter conversation.

If you want that done properly rather than squeezed into the week before renewal, it is the core of our cloud and licensing cost optimisation service, and the Microsoft 365 cost optimisation checklist walks through the same steps if you would rather run it yourself.