Microsoft 365 pricing looks simple until you try to figure out what your business is actually paying for. Four plans, overlapping features, bundled security tools that aren’t well advertised, and a $16/month per-user spread from cheapest to most expensive – the difference matters.
For a 20-person business, choosing Business Basic over Business Premium is a $3,840 annual savings. Choosing Business Premium over Business Standard is a $2,280 annual investment. Neither number is trivial, and neither decision should be made based on habit or whatever the IT reseller recommended three years ago.
Here’s what each plan actually includes, what it costs in 2026, and which businesses should be on which plan.
The Four Microsoft 365 Business Plans at a Glance
All Microsoft 365 Business plans are capped at 300 users. For organizations above that threshold, Microsoft 365 Enterprise plans apply (with different pricing and feature sets).
| Plan | Price/User/Month | Annual Cost (20 users) |
|---|---|---|
| Business Basic | $6.00 | $1,440 |
| Apps for Business | $8.25 | $1,980 |
| Business Standard | $12.50 | $3,000 |
| Business Premium | $22.00 | $5,280 |
Prices reflect annual commitment billing. Monthly billing adds approximately 20%.
Microsoft 365 Business Basic – $6/user/month
Best for: Businesses that primarily use web-based apps and don’t need Office installed on local devices; light users who mostly work in Teams and a browser.
Business Basic is the entry-level plan. It includes Exchange Online email (50GB mailbox), Microsoft Teams, SharePoint, OneDrive (1TB per user), and web versions of Word, Excel, PowerPoint, and other Office apps.
The critical limitation: there are no installed desktop Office applications. Every Office app runs in a web browser. For employees who work primarily in Teams and light document editing, this is workable. For employees who spend significant time in Excel, Word, or Outlook – especially with large files, complex formatting, or offline needs – the browser experience creates real friction.
What’s included:
- Exchange Online email (50GB mailbox per user)
- Microsoft Teams (chat, video, meetings up to 300 participants)
- Web versions of Word, Excel, PowerPoint, OneNote, Publisher, Access
- SharePoint (intranet and file sharing)
- OneDrive for Business (1TB per user)
- Microsoft Forms, Planner, Bookings
What’s missing:
- No installed desktop Office apps
- No advanced cybersecurity tools
- No device management
Bottom line on Basic: If your team works primarily in Teams and light browser-based tools, and you’re price-sensitive, Basic covers the essentials. Most businesses find the lack of installed Office apps to be a meaningful limitation in practice.
Microsoft 365 Apps for Business – $8.25/user/month
Best for: Businesses that need installed Office apps but already have email through another provider.
Apps for Business is the most frequently misunderstood plan. It includes installed desktop Office apps – the full Microsoft 365 suite on up to 5 PCs/Macs and 5 mobile devices per user – but it does not include Exchange Online email or Microsoft Teams.
This plan makes sense in two specific scenarios: businesses using a separate email provider that don’t want to migrate, or organizations that need Office apps as a secondary license for employees who already have an email license.
What’s included:
- Installed desktop Office apps (Word, Excel, PowerPoint, Outlook, OneNote, Publisher, Access)
- OneDrive for Business (1TB per user)
- Web versions of Office apps
What’s missing:
- No Exchange Online email
- No Microsoft Teams (can add Teams Essentials separately)
- No advanced cybersecurity or device management
Microsoft 365 Business Standard – $12.50/user/month
Best for: Most small businesses that need a complete productivity suite – installed Office apps, email, Teams, and cloud storage – without the overhead of advanced security management.
Business Standard is the plan most small businesses should be on. It includes everything in Basic plus installed desktop Office applications, plus Teams webinars (up to 1,000 attendees), Microsoft Loop, Clipchamp video editing, and advanced forms and customer booking features.
The installed Office apps are the primary differentiator from Basic. Employees get full-featured Word, Excel, PowerPoint, and Outlook running locally on their devices – with all the functionality, performance, and offline access that implies.
What’s included:
- Everything in Business Basic
- Installed desktop Office apps (up to 5 PC/Mac + 5 mobile per user)
- Teams webinars (up to 1,000 attendees)
- Microsoft Loop, Clipchamp, Bookings with enhanced features
- Standard support
Bottom line on Standard: This is the right plan for most businesses that just need productivity tools. If cybersecurity is managed separately, or if you have a dedicated IT team handling security, Standard covers everything you need.
Microsoft 365 Business Premium – $22/user/month
Best for: Businesses handling sensitive client data, facing compliance requirements, or wanting a single Microsoft subscription that includes both productivity and cybersecurity without purchasing tools separately.
Business Premium is the plan that’s most frequently undersold and under-recommended to small businesses. The $9.50/month per-user premium over Business Standard buys a significant security bundle that many businesses should be paying for regardless:
Included in Premium that’s not in Standard:
- Microsoft Defender for Business – enterprise-grade endpoint detection and response (EDR) for all devices. Purchased separately, endpoint security at this level costs $3-8/user/month.
- Microsoft Intune (device management) – enroll and manage all company devices from a central console, enforce security policies, remotely wipe lost devices. Intune purchased separately: $8/user/month.
- Azure Active Directory (Entra ID) Premium P1 – Conditional Access policies that block logins from unexpected locations or unmanaged devices, multi-factor authentication enforcement, self-service password reset. Purchased separately: $6/user/month.
- Azure Information Protection P1 – classify and protect sensitive documents with rights management.
- Microsoft Defender for Office 365 Plan 1 – advanced anti-phishing, safe links, and safe attachments for email.
The bundled value of Premium’s security additions, purchased as standalone Microsoft products, totals approximately $17-22/user/month. Business Premium includes them for $9.50/month above Business Standard pricing.
Bottom line on Premium: Any business handling client financial data, health records, legal documents, or operating in a regulated industry should be on Business Premium. The security tools alone justify the price over Standard.
Plan Comparison: Full Feature Matrix
| Feature | Basic | Apps | Standard | Premium |
|---|---|---|---|---|
| Exchange email (50GB) | yes | no | yes | yes |
| Microsoft Teams | yes | no | yes | yes |
| OneDrive (1TB) | yes | yes | yes | yes |
| SharePoint | yes | no | yes | yes |
| Web Office apps | yes | yes | yes | yes |
| Installed Office apps | no | yes | yes | yes |
| Teams Webinars | no | no | yes | yes |
| Defender for Business (EDR) | no | no | no | yes |
| Intune device management | no | no | no | yes |
| Conditional Access (Entra ID P1) | no | no | no | yes |
| Defender for Office 365 P1 | no | no | no | yes |
Which Plan Is Right for Your Business?
Choose Business Basic if: Your team works primarily in Teams and browser-based tools, you have minimal desktop Office needs, and you’re cost-constrained.
Choose Apps for Business if: You need installed Office apps but already have email covered elsewhere, or you’re buying supplemental licenses alongside another plan.
Choose Business Standard if: Your team needs full Office apps plus email and Teams, and you’re managing security through separate tools or a managed security provider.
Choose Business Premium if: You handle sensitive data, need compliance documentation, want device management, or want to consolidate productivity and security into a single subscription.
Key Takeaways
- Business Basic ($6/user/month) includes web-only Office apps, email, and Teams – no installed software
- Apps for Business ($8.25/user/month) adds installed Office but has no email or Teams
- Business Standard ($12.50/user/month) is the full productivity suite – the right plan for most businesses
- Business Premium ($22/user/month) adds enterprise security tools (Defender for Business, Intune, Conditional Access) that together would cost $17-22/user/month if purchased separately
- The jump from Standard to Premium is $9.50/user/month – a strong value if you need the included security tools
- All plans are capped at 300 users; larger organizations should evaluate Microsoft 365 Enterprise
Want help choosing the right Microsoft 365 plan for your business? Get a free consultation at BusinessInternet.tech.
