How the calculation works
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Plan price per user a month, from the dated sources under the inputs:
- Commercial, annual commitment: the with-Teams or no-Teams list price you choose. Enterprise and Office 365 plans with Teams are priced as the plan without Teams plus Microsoft Teams Enterprise, the way new enterprise customers buy them.
- Commercial, month-to-month: Microsoft’s monthly price where it lists one (the business plans, including the plans with Copilot). Everything else keeps its annual price and is flagged in the report.
- Nonprofit: the price on Microsoft’s nonprofit pages, with Teams and an annual commitment. Business Basic is a free grant for up to 300 users.
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Plan cost = users × plan price, a month; × 12 a year.
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Add-on cost = add-on users × add-on price. An add-on can’t have more users than the plans it is for (for example, the Defender and Purview Suites here are for E3 users), and a user needs only one Teams Phone license, so the four Teams Phone options share those users.
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Total = plans + add-ons, with the average per user.
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The other billing term: for commercial prices, the same mix on the other term. Only plans with a monthly price change, so the difference is what those plans’ billing term costs.
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Add-on or step up: when you enter users for one of these add-ons, the report compares, per user a month,
- E3 + Microsoft Defender Suite + Microsoft Purview Suite with E5 (for users with both),
- E3 + Microsoft Defender Suite, and E3 + Microsoft Purview Suite, with E5,
- Business Premium or Business Standard + Microsoft 365 Copilot Business with the same plan with Copilot,
- Business Premium + Defender and Purview Suites with E5,
- E5 + Microsoft 365 Copilot with E7, which also includes Agent 365 and the Microsoft Entra Suite,
and multiplies the difference by those add-on users (at most the users on the base plan) to show what moving them up would cost or save a month. Because each add-on is entered as one number of users, a comparison counts only the users who must be on that plan: the add-on users beyond the users on the other plans that could hold them.
Prices are Microsoft’s US list prices, including the increases of July 1, 2026 (existing customers move to them at renewal). Taxes, discounts and promotions are not in the totals; Microsoft’s Copilot Business offer (for orders from July 1 to December 31, 2026) is shown separately only until it ends. Teams Phone is offered for the business plans, E3 and Office 365 E1 and E3, since E5, E7 and Office 365 E5 include Teams Phone; frontline workers need a frontline Teams Phone license with no published price. Agent 365 on its own and the Microsoft 365 Apps plans are not modeled. The comparisons are about price only: the plans and add-ons are not identical in what they include. The Microsoft 365 Plan Comparison Chart shows what each plan includes.
Worked example
An organization with Teams, on an annual commitment, has 120 Business Premium, 200 E3 and 40 E5 users. 50 of the E3 users have the Microsoft Defender Suite, 30 enterprise users have Microsoft 365 Copilot and 20 Business Premium users have Copilot Business. At the list prices dated under the inputs:
| Line | Users | Price a user a month | Monthly |
|---|---|---|---|
| Business Premium | 120 | $22.00 | $2,640 |
| E3 (no Teams) $30.45 + Teams Enterprise $8.55 | 200 | $39.00 | $7,800 |
| E5 (no Teams) $51.45 + Teams Enterprise $8.55 | 40 | $60.00 | $2,400 |
| Microsoft Defender Suite | 50 | $12.00 | $600 |
| Microsoft 365 Copilot | 30 | $30.00 | $900 |
| Microsoft 365 Copilot Business | 20 | $21.00 | $420 |
- Total: $14,760 a month, $177,120 a year, $41.00 a user a month across 360 users.
- E3 + Defender Suite vs E5: $51.00 against $60.00 a user. Moving the 50 users to E5 would cost $450 a month more.
- Business Premium + Copilot Business vs Business Premium with Copilot: $43.00 against $32.00 a user. Switching those 20 users to the bundled plan would cost $220 a month less.
- Month-to-month: only Business Premium has a monthly price ($26.40), so month-to-month would cost $528 a month more ($6,336 a year); the enterprise plans and add-ons stay at their annual prices.
Reading the report
The report leads with the monthly and annual total and the cost per user, then the plans and add-ons, the other billing term and each add-on comparison. Check first any comparison where the step-up plan costs less: those users would pay less for a plan that includes what they now buy as add-ons. The Microsoft 365 Pricing Guide lists every price used here, with the old prices from before July 1, 2026.
