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Why 1-Month Microsoft 365 Plans Will Cost 20% More

By May 26, 2022May 27th, 2022No Comments


Monthly Microsoft & Office 365 Contract Will see 20 Percent Spike After June 2022

1-month contracts for Microsoft 365 plans will cost 20% more per user as of July 1, 2022, as part of a sweeping price change across several licenses. Microsoft announced the initial “per seat” pricing increases in August 2021 for each included plan, and this second wave of changes will impact customers who are on monthly contracts as opposed to 1-year or 3-year terms. Here is everything you need know about the what, how and why of this new 20-percent premium on month-to-month M365 plans:

March 2022 Price Increases for 6 Microsoft 365 Plans

The pricing changes that went into effect on March 1, 2022, impacted six different Microsoft 365 and Office 365 license tiers with increases from between 9% to 25% as part of the New Commerce Experience (NCE) program Microsoft is rolling out. Refer to the table for a comprehensive breakdown of the price change:


M365 / O365 Plan

Old Price per User

New Price per User

Microsoft 365 Business Basic



Office 365 E1



Microsoft 365 Business Premium



Office 365 E3



Microsoft 365 E3



Office 365 E5




The other big change with the NCE rollout, which can be easy to overlook, is that annual contracts lose the ability to scale down the number of seats (i.e., user licenses) included with their plans. While you still be able to add users, you will not be able to downsize until the next renewal term.

July 2022 Price Increase for Monthly Plans

Starting July 1, 2022, contracts on a 1-month term will receive an additional 20% premium charge on top of the increased per seat pricing. Refer to the table for what the final monthly per seat will look like for each affected M365 plan:


M365 / O365 Plan Old Price per User New Price per User With +20% Cost for Monthly

Final Monthly Price per User

Microsoft 365 Business Basic

$5 $6 $1.20


Office 365 E1

$8 $10 $2.00


Microsoft 365 Business Premium

$20 $22 $4.40


Office 365 E3

$20 $23 $4.60


Microsoft 365 E3

$32 $36 $7.20


Office 365 E5

$35 $38 $7.60



Nonprofit M365 Customers Also See an Increase by September 2022

Microsoft also announced in March 2022 that the nonprofit organization (NPO) version of Microsoft 365 and Office 365 licenses would also see price changes on September 1, 2022. Here is the list of increases included in the announcement:

  • Microsoft Office 365 E1: from 2.00 to 2.50 USD
  • Microsoft Office 365 E3: from 4.50 to 5.75 USD
  • Microsoft Office 365 E5: from 14.00 to 15.20 USD
  • Microsoft 365 E3: from 8.00 to 9.00 USD
  • Microsoft 365 Business Premium: from 5.00 to 5.50 USD

Monthly Microsoft 365 Plans Provide More Flexibility

While annual and triannual Microsoft 365 and Office 365 contracts may take away the ability to scale down your overhead at your convenience, the monthly contracts give you more room to renegotiate how many user licenses you pay for each term. This means that if you have a situation where you are going to be regularly changing the number of users (e.g., bringing on temporary workers), a 1-month contract delivers more flexibility and potentially better ROI since you will not have to continue paying for seats you are no longer using.


Taking Advantage of Microsoft Partner Discounts

Those who purchase their Microsoft 365 or Office 365 from an approved Microsoft Partner can take advantage of promotional offers being provided through vendors. These included locking-in pricing as well as discounts Cloud Solution Providers (CSPs) receive via their partnership terms. Contact us to learn more about which offers are still available and applicable to your contract.

Is a Monthly or Annual Microsoft 365 Contract Better?

Whether a monthly or annual 365 plan is better depends heavily on your business’s size, market, seasonality, share of office/remote to field workers, etc. There are many factors that can impact the final ROI and plenty of scenarios where one delivers more value than the other.

If you are currently on a 1-month contract, you have until June 30, 2022 before the 20% premium raises the price when you renew your monthly plan. From there, you can choose to stay on a monthly term or switch to annual (or triannual with locked-in pricing) and lose the ability to cut down on the number of user licenses you purchased for your term. It is up to you to decide which cost is worth more to your business – although working with a Microsoft Partner like SWK Technologies can help you better determine where the best value lies now and in the future.

Get an Audit of Your Current Microsoft Plan’s Value

As a Gold Microsoft Partner, SWK is able to leverage our technical knowledge and expertise with Microsoft 365 and Office 365 to give you a comprehensive audit of the ROI you are capturing from your plan currently, and how to maximize this going forward. Sign up for a Microsoft Assessment today and get a deeper look into how you get the most out of your Microsoft products for the best price return.

Contact us to schedule your Microsoft Assessment at your earliest convenience and learn how you can get the most out of your Microsoft 365 plan before the next pricing change.

Get Your Microsoft 365 Plan Assessment Today

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