Microsoft sells four small-business plans — Apps for Business, Business Basic, Business Standard and Business Premium — plus the enterprise tiers above them, and the naming tells you almost nothing about which one you need. The honest answer comes down to three questions: do your people need the desktop Office apps, who is managing your devices and identities, and are you anywhere near 300 users? This guide walks through what each plan includes in 2026, what changed with Microsoft's 1 July 2026 price and packaging update, and the decision points that actually matter — including the one gap that catches most small businesses.
The short answer
If your business just needs hosted email, Teams and files, Business Basic at $7 per user per month is enough. If people live in desktop Word, Excel and Outlook, Business Standard at $14 adds the installed apps. But if you have any compliance obligation, cyber-insurance policy, BYOD phones, or simply nobody whose job is securing your endpoints, Business Premium at $22 is almost always the right call — the extra $8 buys conditional access, device management and enterprise-grade endpoint detection that would cost far more assembled from third-party tools. And if you are approaching 300 users or need advanced compliance and security tooling, skip ahead to the enterprise tiers covered in our E3 vs E5 vs E7 comparison.
Pricing after the July 2026 increase
Microsoft raised most commercial prices on 1 July 2026 — the first broad increase since 2023. Business Basic rose 16% and Business Standard 12%; Business Premium was left untouched, which quietly narrows the gap between Standard and Premium to $8. List prices below are USD, per user per month, on an annual commitment. Existing customers keep their current price until renewal, and prices vary by region and channel — treat these as planning numbers, not quotes.
| Plan | Price (before 1 Jul 2026) | Price (from 1 Jul 2026) | Headline positioning |
|---|---|---|---|
| Apps for Business | $8.25 | $10.00 | Desktop Office apps + OneDrive only — no email, no Teams |
| Business Basic | $6.00 | $7.00 | Email, Teams, SharePoint/OneDrive, web and mobile apps |
| Business Standard | $12.50 | $14.00 | Basic + desktop Office apps, webinars, Clipchamp, Loop |
| Business Premium | $22.00 | $22.00 (no change) | Standard + Entra ID P1, Intune, Defender for Business, Defender for Office 365 P1 |
Cheaper Teams-less variants of all three Business suites exist ($5.40 / $10.79 / $18.79) — originally an EU remedy, now sold more widely. If your organisation genuinely standardises on Slack or Zoom, they are a legitimate saving; otherwise the with-Teams SKU is the default.
What the July 2026 update added to every tier
The price increase came with a packaging update rolling out through summer 2026, so the tiers you compared a year ago have shifted:
- +50 GB of mailbox storage for Basic, Standard and Premium — taking the standard mailbox from 50 GB to 100 GB per user.
- URL time-of-click protection for Basic and Standard — links in email are re-checked at the moment the user clicks, not just on delivery. This closes a slice of the phishing gap that previously required Defender for Office 365 (Premium already had the full version).
- Copilot Chat enhancements and Copilot Chat Analytics across all three — inbox and calendar awareness plus access to Word, Excel and PowerPoint agents in the free Copilot Chat, short of the full $30 Microsoft 365 Copilot add-on.
Plan by plan: what you are actually buying
Apps for Business — the one most people pick by mistake
Apps for Business is the desktop Office suite (Word, Excel, PowerPoint, Outlook) plus 1 TB of OneDrive — and nothing else. No Exchange mailbox, no Teams, no SharePoint. It exists for businesses whose email lives elsewhere (Google Workspace, on-premises, an ISP) but who still need real Excel. After the July increase it costs $10 — more than Business Basic — so unless you are deliberately keeping email off Microsoft, one of the full suites is better value.
Business Basic — email and collaboration, browser only
Business Basic is the floor: Exchange Online (now 100 GB mailboxes), Teams, SharePoint, 1 TB OneDrive per user, and the web and mobile versions of the Office apps. What it does not include is the installed desktop apps — spreadsheet-heavy roles will hit the limits of Excel on the web quickly. It suits front-desk, field and part-time roles, mailbox-only users, and cost-conscious startups that live in the browser. At $7 it remains the cheapest way to get a business-grade mailbox with a custom domain.
Business Standard — the default productivity pick
Business Standard is Basic plus the desktop Office apps on up to five devices per user, webinar hosting with attendee registration, Clipchamp video editing and Microsoft Loop. This is the plan most small businesses land on, and for pure productivity it is the right call. What it shares with Basic, though, is the thing that matters most in 2026: essentially no security management layer. No conditional access, no device management, no endpoint detection — just baseline Exchange Online Protection and (new this year) time-of-click link checking.
Business Premium — the security plan disguised as a productivity plan
Business Premium is everything in Standard plus what is effectively a small-business security stack:
- Entra ID P1 — conditional access ("require MFA outside the office", "block legacy authentication"), self-service password reset, and group-based licensing. This is the control cyber-insurance questionnaires are really asking about.
- Microsoft Intune Plan 1 — device and application management for company and BYOD hardware: enforce encryption and screen locks, push Wi-Fi and VPN profiles, and wipe company data off a departed employee's personal phone without touching their photos.
- Defender for Business — enterprise-grade endpoint detection and response (EDR) for up to 300 users across Windows, macOS, iOS and Android, with automated investigation and remediation. This is a real EDR product, not a glorified antivirus.
- Defender for Office 365 Plan 1 — Safe Links and Safe Attachments on top of Exchange Online Protection, sandboxing attachments before delivery.
- Purview data protection basics — sensitivity labels, data loss prevention policies for email and files, and Azure Information Protection.
Priced separately, Entra ID P1 alone is now $7 and Intune Plan 1 about $8 — before you have bought EDR or advanced email filtering from anyone. The $8 jump from Standard to Premium is the best-value security spend most small businesses will ever make, which is presumably why Microsoft left Premium's price alone while raising everything around it.
The 300-user ceiling — and when to go enterprise
Every Business plan is capped at 300 licensed users per subscription. Past that, or before it if your requirements outgrow the SKU, the enterprise tiers take over. Move to E3 (or higher) when any of these are true:
- You are approaching 300 users — plan the transition before you hit the wall, not after.
- You need unlimited mailbox archiving, litigation hold across the estate, or Purview eDiscovery beyond the basics.
- Compliance requires the advanced stack: insider risk management, records management, eDiscovery Premium — that is E5 territory.
- You want Entra ID P2 risk-based conditional access or Defender for Endpoint Plan 2 rather than Defender for Business.
Note that Microsoft 365 E3 now costs $39 — Business Premium at $22 covers a surprising share of the same ground for organisations under the cap, which is why the right move is often to stay on Premium until a specific requirement (not just headcount momentum) forces the jump. Licences are assigned per user, so you can also mix: Business Premium for the office, Business Basic for frontline mailboxes, an E5 for the compliance officer. The full enterprise decision is covered in our E3 vs E5 vs E7 guide.
A decision framework
| Choose this | When this is true |
|---|---|
| Apps for Business | Email is deliberately hosted elsewhere and you only need the desktop Office apps plus OneDrive. |
| Business Basic | The role needs a mailbox, Teams and file access, and works fine in browser and mobile apps — front desk, field, part-time, shared mailbox users. |
| Business Standard | People need installed Office apps, and device/identity security is genuinely handled by something else you already pay for and manage. |
| Business Premium | Any of: cyber-insurance or compliance requirements, BYOD, remote work, no dedicated security staff, or you answered "nobody, really" to "who manages your endpoints?" This should be the default for most businesses. |
| E3 / E5 / E7 | More than 300 users, advanced compliance/eDiscovery needs, Entra ID P2, Defender for Endpoint P2, or an org-wide Copilot and AI-agent commitment. |
| Mix-and-match | Different roles have different needs. Premium for knowledge workers, Basic for frontline, enterprise SKUs for specific users — per-user assignment means one size never has to fit all. |
The mistakes that cost real money
- Buying Standard, then bolting on third-party security. Standard plus a separate MDM, EDR and email-filtering vendor routinely exceeds Premium's $22 — with three more consoles, three more invoices and none of the integration. Run the comparison before renewing anything.
- Buying Premium and never turning the security on. The licence includes conditional access, Intune and Defender for Business — none of which do anything unconfigured. A Premium tenant with no CA policies and unenrolled devices is just an expensive Standard. If this might be you, our free x365 audit tool checks conditional access coverage, MFA posture and legacy-auth exposure from your browser without sending tenant data anywhere, and the conditional access gaps guide covers the policies to build first.
- Upgrading everyone because someone needs one feature. One person needing webinar hosting does not justify moving forty mailbox-only users off Basic. Assign per user.
- Ignoring the renewal timing. Existing subscriptions keep their pre-July price until renewal. If you are mid-term, you have not felt the increase yet — budget for it now rather than discovering it on the renewal invoice.
- Forgetting email fundamentals. No licence tier fixes a missing SPF, DKIM or DMARC record. If your mail is landing in spam, that is DNS, not licensing — our deliverability guide covers the records every custom domain needs.
Bottom line
Pick by role, not by habit: Basic where a browser is enough, Standard only where desktop apps are needed and security is truly handled elsewhere, and Premium as the sensible default for any business that takes its own risk seriously — which, with Premium's price frozen while Basic and Standard rose, is a stronger argument in 2026 than it has ever been. Cross the 300-user line, or the advanced-compliance line, and the conversation moves to E3, E5 and E7. Whatever you pick, the licence is only the ticket — the value is in the features you actually switch on.
Frequently asked questions
What is the difference between Microsoft 365 Business Basic, Standard and Premium?
Business Basic ($7/user/month) provides business email, Teams, SharePoint, 1 TB OneDrive and the web and mobile Office apps. Business Standard ($14) adds the installed desktop Office apps, webinar hosting, Clipchamp and Loop. Business Premium ($22) adds the security and management layer: Entra ID P1 conditional access, Intune device management, Defender for Business endpoint detection, Defender for Office 365 Plan 1 and Purview data-protection basics. All three are capped at 300 users.
How much do Microsoft 365 Business plans cost after the July 2026 price increase?
From 1 July 2026, US list prices on annual commitment are: Apps for Business $10 (was $8.25), Business Basic $7 (was $6), Business Standard $14 (was $12.50), and Business Premium unchanged at $22. Existing customers keep their previous price until renewal. Teams-less variants cost $5.40, $10.79 and $18.79 respectively. Prices vary by region and channel.
Is Microsoft 365 Business Premium worth it over Business Standard?
For most businesses, yes. The $8 difference buys Entra ID P1 (conditional access and MFA enforcement), Intune device management, Defender for Business EDR and Defender for Office 365 Plan 1. Bought separately, Entra ID P1 is $7 and Intune about $8 per user per month before adding any endpoint or email security product. If you have cyber-insurance requirements, BYOD devices, remote workers or no dedicated security staff, Premium is almost always cheaper than assembling equivalents from third-party tools.
What happens when my business passes 300 users?
Each Microsoft 365 Business plan supports a maximum of 300 licensed users. Beyond that you assign enterprise licences (Office 365 or Microsoft 365 E3/E5) for additional users — Business and Enterprise SKUs can coexist in one tenant, so you can migrate gradually. Plan the transition before you approach the cap, and reassess requirements at the same time: enterprise tiers add unlimited archiving, advanced eDiscovery and stronger security tooling, at a higher price ($39 for Microsoft 365 E3).
What new features did the July 2026 update add to Business plans?
Alongside the price change, Microsoft rolled new capabilities into the Business suites through summer 2026: an extra 50 GB of mailbox storage per user (bringing standard mailboxes to 100 GB) on all three plans, URL time-of-click protection for Business Basic and Standard, and Copilot Chat enhancements (inbox and calendar awareness, plus Word, Excel and PowerPoint agents) with Copilot Chat Analytics across all tiers.
Do I need the version with or without Microsoft Teams?
The Teams-less Business SKUs ($5.40 Basic, $10.79 Standard, $18.79 Premium) exist as a result of EU competition remedies and are a real saving only if your organisation genuinely standardises on another collaboration platform such as Slack or Zoom. If anyone will use Teams for meetings or chat, the with-Teams SKU is simpler and effectively cheaper than adding Teams back separately later.