Microsoft Teams Pricing: Plans, Features, and New Updates in 2026
Benjamin Grant
Lark Content Manager
Aug 5, 2026
Benjamin Grant
Aug 5, 2026
14 min read
If Microsoft Teams' pricing page has left your head spinning, you're not alone! While researching for this article, I had to read the same pages over and over again to discern the differences between the plans. The tabs for individual vs. enterprise vs. business plans, as well as the options for "with Teams" and "without Teams" really make it difficult to compare the plans.
So let me save you the headache. In this guide, I'll break down the Microsoft Teams plans, from the free version to enterprise-level plans, and discuss whether it's worthwhile to upgrade. We'll also take a look at the new pricing for this year and alternatives you should consider.
New pricing updates in 2026
These Microsoft Teams pricing updates are effective July 1, 2026.
- Standalone Teams plans remain unchanged: This major update does not touch the standalone Microsoft Teams plans. Microsoft Teams Essentials stays at $4/user/month and Microsoft Teams Enterprise stays at $8.55/user/month.
- Business plan price hikes: Business Basic rises from $6 to $7 per user/month (16%) and Business Standard from $12.50 to $14 per user/month (12%); Business Premium stays unchanged at $22.
- More value bundled in: Business plans will include an additional 50GB mailbox storage, URL time-of-click protection, and enhanced Copilot Chat features in the summer of 2026.
- Enterprise plan price hikes: Office 365 E3 goes from $23 to $26 per user/month (13%) and Microsoft 365 E5 from $57 to $60 per user/month (5%).
- Government, frontline, and nonprofit pricing is also rising: Government suites increase roughly 5–13% and frontline suites 25–33%, with any increase above 10% phased over multiple years; nonprofit pricing (a fixed 60–75% discount off commercial) moves up in line with commercial rates.
What is Microsoft Teams and why use it?
Microsoft Teams (often shortened to MS Teams) is a collaboration and communication platform designed to help teams stay connected, organized, and productive. Launched in 2017, it has quickly become a popular tool for businesses, schools, non-profits, and governments around the world.
Image source: microsoft.com
One of the key reasons for its popularity is its integration with Microsoft 365 (formerly Office 365). If you're already using apps like Microsoft Word, Microsoft Excel, Microsoft Loop, Microsoft Bookings and Microsoft Access, then Teams can act as a central hub where you can collaborate on files, schedule meetings, and communicate in one place.
Microsoft Teams pricing plans at a glance
Pricing is current as of July 9, 2026, and may be subject to change. Check the Microsoft Teams website for the latest updates.
Microsoft Teams pricing plans explained
With over 320 million monthly active users in 2024, Microsoft Teams is one of the most popular videoconferencing software in the market. This success is partly attributable to its wide range of pricing options, which appeals to different audiences. The plans are now divided into Home, Business, and Enterprise. Note that only Home offers a free Microsoft Teams plan. Let's take a closer look at the Business plans first.
Microsoft Teams Business plans
Image source: microsoft.com
Microsoft Teams Essentials: Affordable collaboration for small teams
$4.00 per user/month (billed annually) or $4.80 per user/month (billed monthly)
The Microsoft Teams Essentials plan is an excellent entry-level option for small teams or businesses that only need videoconferencing software without the complexity of the full Microsoft 365 suite. Key features include:
- Host group meetings for up to 30 hours with a maximum of 300 participants.
- Use 10 GB of cloud storage per user for file sharing and collaboration.
- Share files, assign tasks, and conduct polls seamlessly during calls and in chats.
- Record meetings with transcripts and live captions (English only) to keep everyone aligned.
- Protect corporate information with data encryption for meetings, chats, calls, and files.
- Polish communications with built-in AI grammar and style suggestions.
This plan is ideal for small businesses or teams looking for an affordable solution to manage online meetings and collaboration without needing access to advanced Microsoft 365 productivity tools.
Microsoft 365 Business Basic: More features for growing teams
$7.00 per user/month (billed annually) or $8.40 per user/month (billed monthly)
The Business Basic plan builds on the Essentials package by adding powerful tools for growing teams that need more storage, enhanced collaboration, and custom business branding. Key features include everything in the Essentials plan, plus:
- Use a professional custom business email (e.g., you@yourbusiness.com) to enhance brand identity.
- Access lightweight web and mobile versions of Word, Excel, PowerPoint, Outlook, Planner, and more.
- Store files, documents, and secure cloud backups with 1 TB of OneDrive storage per user.
- Protect email and communications with automatic spam and malware filtering.
- Separate call participants into smaller, focused discussion groups using breakout rooms.
- Experience AI chat with web grounding, writing assistance, data analysis, and access to custom agents.
This plan is perfect for growing teams that need more professional branding, cloud storage, and core collaboration tools without requiring offline desktop versions of Office apps.
Microsoft 365 Business Standard: Popular choice for midsize businesses
$14.00 per user/month (billed annually) or $16.80 per user/month (billed monthly)
The Business Standard plan is a popular choice for mid-sized businesses or teams that rely heavily on full desktop Office apps for daily operations. It includes everything in the Business Basic plan, plus:
- Download and use full offline desktop versions of Word, Excel, PowerPoint, and Outlook across PCs and Macs.
- Host professional webinars with attendee registration, custom event layouts, and robust engagement reporting.
- Co-create, sync, and manage project components in real time across apps using Microsoft Loop.
- Create and edit professional-looking company videos with tools, filters, and effects in Microsoft Clipchamp.
- Simplify appointment scheduling and management for customers, clients, and colleagues with Microsoft Bookings.
This plan is ideal for teams that need robust desktop tools to manage projects, collaborate effectively offline and online, and host professional events.
Microsoft 365 Business Premium: Advanced cybersecurity and device management
$22.00 per user/month (billed annually) or $26.40 per user/month (billed monthly)
The Business Premium plan is a comprehensive cloud productivity and cybersecurity solution designed for organizations that need robust endpoint protection and device management alongside full Office apps. It includes everything in the Business Standard plan, plus:
- Defend against cyberattacks, phishing, malware, and ransomware with Microsoft Defender for Business.
- Deploy, secure, and update company-owned and personal PCs, Macs, tablets, and mobile devices using Microsoft Intune.
- Safeguard employee accounts and credentials with Microsoft Entra ID P1, conditional access policies, and multi-factor authentication.
- Discover, classify, and secure sensitive business data from unauthorized sharing using Microsoft Purview Information Protection.
- Securely connect and stream Windows desktop and apps to any device with Azure Virtual Desktop integration.
This plan is ideal for small and medium-sized businesses with up to 300 users that require full desktop productivity tools combined with top-tier cybersecurity, remote device management, and data compliance.
Pro tip: The official Teams pricing page replaced Business Standard and Premium with the pricier with Copilot bundle. To buy the lower-cost editions without AI, you will need to visit their dedicated plan pages directly.
Business plans comparison table
Microsoft Teams Enterprise plans
Image source: microsoft.com
Microsoft Teams Enterprise: Standalone collaboration for large organizations
$8.55 per user/month (billed annually) or $10.26 per user/month (billed monthly)
The Microsoft Teams Enterprise plan is an entry-level option for large companies that need dedicated, professional videoconferencing software without the full Microsoft 365 enterprise suite. Key features include:
- Host group meetings for up to 30 hours with a maximum of 1,000 participants.
- Use 10 GB of cloud storage per user for enterprise file sharing and collaboration.
- Protect corporate information with top-tier data encryption for meetings, chats, calls, and files.
- Access 24/7 phone and web support directly from Microsoft.
- Supercharge the plan by adding Microsoft 365 Copilot for enterprise AI assistance.
This plan is ideal for large enterprises looking for a standalone, cost-effective solution to manage high-capacity meetings and real-time collaboration without paying for bundled desktop productivity apps.
Microsoft 365 E3: Powerful productivity, Teams, and compliance for enterprises
$39.00 per user/month (billed annually) or $46.80 per user/month (billed monthly)
The E3 plan builds a robust foundation for large organizations by combining full Microsoft Teams collaboration with core enterprise productivity apps, advanced device management, and enhanced security. Key features include:
- Host meetings for up to 1,000 participants with full Microsoft Teams chat, calling, and webinar capabilities included.
- Download and use offline enterprise versions of Word, Excel, PowerPoint, Outlook, and OneNote across devices.
- Store files, documents, and backups with 1 to 5+ TB of scalable OneDrive cloud storage per user.
- Deploy, manage, and update corporate devices at scale with Windows 11 Enterprise E3 and Microsoft Intune.
- Safeguard identities and endpoints with core identity management and Microsoft Defender Plan 1 threat protection.
- Access built-in Microsoft 365 Copilot Chat for writing assistance, data analysis, and web information at no extra cost.
- Govern, protect, and manage sensitive corporate data using basic Microsoft Purview capabilities.
This plan is perfect for large organizations requiring a comprehensive bundle that combines enterprise-grade Microsoft Teams with powerful desktop productivity tools, endpoint management, and core compliance capabilities.
Microsoft 365 E5: Best-in-class security, analytics, voice, and Teams
$60.00 per user/month (billed annually) or $72.00 per user/month (billed monthly)
The E5 plan is the top-tier enterprise bundle for corporations with strict security requirements and advanced analytical needs, featuring the complete Microsoft Teams suite alongside cloud telephony. It includes everything in the E3 plan, plus:
- Make and receive calls outside your organization using integrated cloud-based telephony with Microsoft Teams Phone.
- Defend against sophisticated cyberattacks with extended detection and response (XDR) and Microsoft Defender Plan 2.
- Manage higher data risks and complex regulatory requirements using advanced data security tools in Microsoft Purview.
- Deliver enterprise-wide insights and enable fast, informed decisions with full access to Power BI Pro.
- Safely scale generative AI apps and Copilot agents across your data estate with an enhanced security architecture.
This plan is ideal for enterprises that need the absolute highest tier of security, advanced compliance tools, business analytics, and integrated enterprise voice and videoconferencing capabilities to support complex, large-scale operations.
Enterprise plans comparison table
Microsoft Teams free vs paid plans: is it worth upgrading?
Here's the first thing to know. Microsoft only offers one free version of Teams, and it's designed for a single user. That alone makes it impractical for most teams, because the moment you need to collaborate with colleagues under one managed account, you've outgrown it. So for most businesses, the real question isn't whether to upgrade, but which paid plan to choose.
What you get with the free plan
The free tier isn't useless. It's actually a decent way to test the waters, giving you handy basics like screen sharing, polls, file sharing, and unlimited chat, which is enough to get a feel for how Teams works. The catch is that the limits add up quickly.
- Built for one person: there's no shared admin, no centralized user management, and no way to provision accounts for a team.
- 60-minute cap on group meetings: one-on-one calls are unlimited, but group meetings cut off at 60 minutes.
- 5 GB of cloud storage: fine for a few files, but restrictive the moment you're storing recordings or collaborating on documents.
- No Office desktop apps, business email, or advanced security: those only come with paid Microsoft 365 plans.
Why upgrading might be worth it
Paid versions of Teams like Essentials, Business Basic, and Business Standard offer several additional features over the free version:
- Longer meetings: Essentials and higher-tier plans allow group meetings for up to 30 hours with up to 300 participants, making them ideal for teams that rely heavily on video conferencing.
- More storage: Paid plans provide significantly more cloud storage, with up to 1 TB per user, ensuring your team has ample space for files, documents, and recordings.
- Additional apps and support: Paid tiers unlock tools like meeting recordings, live captions, and transcripts and offer phone and web support. Business Standard and higher plans also include desktop versions of Microsoft 365 apps like Word, Excel, and PowerPoint.
- Microsoft 365 Copilot: Available as an add-on ($30.00 user/month), Copilot uses AI to enhance productivity by assisting with tasks like drafting documents, analyzing data, and summarizing meetings.
Hidden costs to watch out for
In my experience, the base plan rarely includes everything you actually need. Between calling plans, AI add-ons, and meeting-room licenses, the real bill tends to creep well past the sticker price, so budget an extra 10–20% on top of your base subscription
Teams Phone + Calling Plans (making actual phone calls): Teams Phone starts at ~$10/user/month, but that's just the license to enable calling — it doesn't include minutes. To dial external numbers, you'll also need a Calling Plan (roughly $13–$34/user/month) or your own carrier via Direct Routing. I assumed a full business phone system was baked in — it isn't. Realistically, budget ~$25–$35/user/month once calling is fully set up.
Teams Rooms (conference-room hardware licensing): If you're kitting out physical meeting rooms, each room needs its own license on top of your user plans. Teams Rooms Basic is free but caps you at 25 rooms with limited management features; Teams Rooms Pro runs ~$40/room/month and unlocks advanced management, security, and meeting features. This is billed per room, not per user — and it's entirely separate from the room hardware itself, which is another line item.
Microsoft 365 Copilot (advanced AI): The AI features included in your plan are limited. Full Copilot — the assistant that drafts, summarizes meetings, and works across Word, Excel, Outlook, and Teams — is a separate $30/user/month add-on.
Teams Premium: AI meeting recaps, live translated captions, meeting watermarks, advanced webinars, and virtual appointments live in Teams Premium, an extra ~$10/user/month add-on — not part of the standard Teams or Business plans.
Audio Conferencing: Dial-in/dial-out for meetings is bundled into some enterprise suites but is a separate licensed add-on for others. If attendees need to join meetings by phone, confirm whether you'll have to pay for it.
The all-or-nothing storage trap: Business Basic includes only limited cloud storage (far less than the 1 TB per user on higher tiers). If just a few employees need more OneDrive space or premium features, you often have to move everyone up a tier rather than upgrading individuals.
Unused licenses and offboarding: You keep paying for departed employees until their licenses are manually reassigned or removed.
Third-party backups: Microsoft secures its infrastructure, but its native retention isn't a full disaster-recovery plan for user-caused deletions. Many businesses pay separately for third-party SaaS backup tools.
Implementation expenses: Budget for initial setup, data migration, user training, and ongoing IT support — separate from the software subscription itself.
Microsoft Teams pricing vs competitors
Microsoft Teams isn't the only collaboration tool out there. Popular alternatives like Slack, Zoom, and Lark offer unique features and pricing models that might better suit your team's needs. Let's dive into how Microsoft Teams stacks up against these competitors.
Microsoft Teams vs Slack
Slack is often seen as Microsoft Teams' closest rival, especially for team communication. While Slack is known for its sleek design and user-friendly interface, its pricing structure is less competitive for larger teams.
- Pricing differences: Slack's free plan has stricter limits on message history and file storage compared to Microsoft Teams. Paid plans for Slack can also become expensive as your team grows.
- Features: Microsoft Teams excels in offering integrated video conferencing, while Slack relies on third-party integrations for similar functionality. Additionally, Teams' deep integration with Microsoft 365 gives it an edge for users already in the Microsoft ecosystem.
Microsoft Teams vs Zoom
Zoom is a household name for video conferencing, but how does it compare to Microsoft Teams?
- Pricing for video conferencing: Zoom's free plan is generous with meeting durations, offering up to 40 minutes for group calls. However, Microsoft Teams' free plan allows up to 60 minutes, giving it a slight advantage for longer meetings.
- Meeting features: While Zoom is a leader in video quality and ease of use, Microsoft Teams offers additional collaboration tools like file sharing and task management, making it a better all-in-one solution for teams.
Microsoft Teams vs Lark: which offers better value?
Lark is an emerging competitor that stands out for its innovative features and more integrated ecosystem. Here's why it might be a better fit for some teams:
- Integrated design: Lark combines AI, chat, video conferencing, cloud storage, and document collaboration into a single platform. Unlike Microsoft Teams, which relies on separate Microsoft 365 apps, Lark's tools are natively integrated, offering a seamless experience.
- Built-in AI across the workspace: Lark's AI is native to the app, so it draws on full context from your chat, meetings, and docs, with the ability to generate polished web pages, decks, videos, and analysis reports in one click. Microsoft Teams relies on separately licensed Copilot add-ons layered onto its apps.
- AI agents that work autonomously: Lark's AI Teammates are always-on AI agents that can be deployed in a minute to assign tasks, drive follow-through, and take repetitive work off your plate. Microsoft Teams has no comparable native agent that operates continuously without setup.
- Higher cloud storage: Lark's free plan comes with 100 GB of cloud storage and paid plans provide 15 TB. In contrast, Microsoft Teams' free plan offers only 5 GB, and most of its paid plans only offer 1 TB of storage limits.
- Built-in data management platform: Designed for versatility, Base is a highly customizable, zero-code platform that supports a diverse range of use cases from project management to CRM. It enables effective data visualization through different project views and provides a dashboard for in-depth analysis and real-time metrics monitoring. Automation is easy to set up, allowing users to streamline repetitive tasks and improve overall workflow efficiency.
- Free plan supports up to 20 users: Lark's free plan allows up to 20 users, making it a great option for SMEs or startups. In comparison, Microsoft Teams' free plan is limited to just 1 user, which can be restrictive for collaborative work.
- Cross-timezone collaboration: For global teams, Lark's built-in timezone tools make scheduling meetings across different regions effortless. Lark also offers real-time language translations, allowing team members who speak different languages to easily communicate in their native language. Microsoft Teams offers basic calendar features but lacks the same level of optimization for distributed teams.
- Modern interface and ease of use: Lark's sleek, intuitive design makes it easy for new users to get started. Microsoft Teams, while powerful, can feel overwhelming for those unfamiliar with Microsoft's ecosystem.
If your team prioritizes cloud storage, simpler interfaces, or global collaboration, Lark is worth exploring. For a deeper dive, see Lark vs. Microsoft Teams: Which Communication and Collaboration Tool is Right for Your Business?
Tips for choosing the right Microsoft Teams plan
- Team size & budget: Consider your team's size and budget to guide your plan selection. The free or Essentials plans are suitable for smaller teams, while Business Standard or Premium offer more features for larger organizations with greater needs.
- Storage & collaboration: Evaluate your storage and collaboration requirements to ensure the plan meets your team's needs. If frequent sharing of large files is common, a plan like Business Basic with 1 TB of storage per user is recommended, and consider plans with Microsoft 365 apps for document collaboration.
- Meeting needs: Assess your video conferencing frequency and duration to determine if the free plan's limitations are acceptable. Upgrade to paid plans like Essentials or Business Basic for longer meetings and features like meeting recordings if your team relies heavily on video calls.
- Security & compliance: Prioritize security and compliance features if your organization handles sensitive information. The Business Premium plan offers advanced security measures, such as data loss prevention and device management, to protect your team's data.
- Test the free plan: Begin by testing the free version of Microsoft Teams to explore the platform's basic features before committing to a paid plan. This approach allows you to assess whether upgrading is necessary for your team's specific usage patterns and requirements.
Conclusion
Microsoft Teams offers scalable pricing plans for all team sizes and industries, ranging from a free option to the comprehensive Enterprise plans. Choosing the right plan depends on your team's needs, whether that's affordable collaboration tools for a small business, advanced security for a large enterprise, or a reliable platform for educators or remote workers. Starting with the free plan is a great way to explore basic features before upgrading to a paid plan to unlock additional tools and enhance productivity.
That said, if you're searching for a fresh, all-in-one alternative that's designed for teams of any size, Lark is a compelling option worth considering. With features like up to 15 TB cloud storage, seamless integration of chat, documents, and video conferencing, and advanced tools for global collaboration, Lark offers a modern and cost-effective solution for businesses in any industry.
FAQs about Microsoft Teams pricing
Is Microsoft Teams free?
Yes, though Microsoft Teams offers a free plan for individuals only and not businesses. The plan includes essential features like video calling, chat, and file sharing.
What's the difference between Microsoft Teams Essentials and Business Basic?
The Essentials plan is more affordable and focuses on core collaboration features like extended meeting times and 10 GB of storage. Business Basic, on the other hand, includes additional benefits like 1 TB of storage and access to web and mobile versions of Microsoft 365 apps.
Can I use Microsoft Teams without Microsoft 365?
Yes, the Essentials plan allows you to use Microsoft Teams without requiring a full Microsoft 365 subscription. However, plans like Business Basic and Business Standard include access to Microsoft 365 apps for enhanced functionality.
Are there discounts for nonprofits or education?
Yes, Microsoft offers special pricing and discounts for eligible nonprofit organizations and educational institutions. These plans provide access to Microsoft Teams and other Microsoft 365 tools at a reduced cost.
What's the best Microsoft Teams plan for large organizations?
For large organizations, the Enterprise plans are often the best choice. It includes advanced security features, device management tools, and premium collaboration capabilities, making it ideal for enterprises with complex needs.
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Boost team efficiency by 10x
Save up to 70% on software costs
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