Microsoft says it will raise the prices of its Microsoft 365 software subscriptions — which include apps such as Word, PowerPoint, and Excel — for most of its business, enterprise, and government customers on 1 July 2026, including in Australia.

The technology giant announced the global changes on Thursday, just over a year after it began controversial price hikes for its personal subscriptions in Australia which the nation's consumer watchdog later found had misled consumers by hiding the existence of cheaper plans.

Microsoft would not confirm how much Microsoft 365 prices would rise for its Australian business, enterprise, and government customers in 2026 when contacted by Information Age, but stated it regularly reviewed its prices.

This was despite the company's corporate vice president of Microsoft 365 and Copilot, Nicole Herskowitz, having detailed price rises for US customers in a blog post announcing global price increases, which stated Microsoft was “sharing these updates now to give customers ample time to plan”.

A company spokesperson told Information Age, “These latest updates reflect the expanded capabilities and ongoing investments in Microsoft 365."

Exact pricing changes for US customers, shared by Herskowitz, showed business and enterprise subscriptions of Microsoft 365 Suite would rise in that country between five per cent and 17 per cent per month, depending on the plan.

Workers who Microsoft deems are “frontline” — which are typically charged the lowest amount for 365 as much of their time is spent dealing directly with customers or the general public — will see the biggest percentage increases in cost of between 25 and 33 per cent per month.

Business Premium and Office 365 E1 (Enterprise) customers would not see any price change in the US, according to Microsoft’s announcement.

“The changes will apply globally with local market adjustments for our commercial products and nonprofit pricing will be adjusted in line with commercial pricing,” Herskowitz wrote.

Microsoft separately announced the cost of most of its 365 plans for government customers would also increase by between five and 13 per cent.


Microsoft's 1 July 2026 $US price changes for 365 business, enterprise, and frontline workers vary from zero to 33 per cent. Image: Microsoft / Supplied

AI features ‘increased the value’ of 365, Microsoft says

Herskowitz said new features Microsoft had begun adding to Microsoft 365, including several “empowered by AI”, had “increased the value of our suites across security, productivity, and management”.

The company cited its AI-based Copilot Chat and Copilot Agent Mode features, as well as new Security Copilot agents and email security and endpoint management capabilities available to some enterprise customers.

“These changes reflect our commitment to helping organisations of every size protect their people and data, streamline IT operations, and confidently embrace the future of work,” Herskowitz wrote.

In a separate blog post, senior director of Microsoft 365 product marketing, Caroline Stanford, said the company was also adding such features to more of its government subscriptions.

“To help public sector organisations stay ahead of emerging threats and regulatory demands, we're enhancing our Microsoft 365 Government offerings with additional security and management capabilities empowered by AI,” she wrote.


Microsoft says price rises 'reflect the expanded capabilities and ongoing investments in Microsoft 365'. Image: Microsoft / Supplied

Microsoft refunds Aussies after being sued by ACCC

Microsoft has begun refunding Australians with personal subscriptions to Microsoft 365 after it failed to tell them they could stay on their existing plan when the company increased its prices and added new AI features beginning in late 2024.

Users who attempted to cancel their plans were shown the option of reverting to a “Classic” subscription which did not contain new AI features and avoided price hikes of between 30 and 45 per cent on Microsoft’s new AI-enabled plans.

These users quickly informed each other about how to avoid paying more to Microsoft, before the Australian Competition and Consumer Commission (ACCC) began investigating the company's actions.

The regulator took Microsoft to court in October 2025, and alleged the multinational had made “false or misleading representations” to around 2.7 million Australian customers.

The tech giant announced plans to issue refunds just over a week later, when it apologised to customers "for falling short” of its own standards.