On April 1, 2025, Microsoft increased prices by 5% for customers who pay for Microsoft 365 and other license-based subscriptions on a monthly billing plan. However, if you pay your annual or triennial Microsoft subscription upfront, your price will stay the same.
Monthly Payments Will Cost 5% More
Microsoft’s new pricing structure means that monthly billing plans will now carry a 5% premium compared to the same subscriptions billed annually or triennially upfront.
This change applies to customers on annual or three-year subscription terms who choose to split payments monthly. While the product and term remain the same, the billing method now impacts the total cost.
You can read Microsoft’s official announcement here.
Upfront Annual and Triennial Plan Cost Stays the Same
There is no price increase if you pay for your subscription upfront. Customers using these billing options will continue to pay the current rate they are used to seeing. If you’re already on an annual or three-year upfront billing cycle, nothing will change. Your subscription cost stays locked in at today’s rate.
Example: How Billing Impacts the Monthly Cost
Let’s say your Microsoft 365 subscription costs $1,500 per year when you pay annually upfront. If you choose monthly billing, the same plan will cost 5% more over the course of a year.
Microsoft Price Increase Breakdown
| Billing Method | Annual Total Cost | Monthly Cost | Cost Difference |
|---|---|---|---|
| Annual Payment | $1,500 | $125 | - |
| Monthly Payment | $1,575 | $131.25 | +$75 per year |
Other Price Updates in April
Alongside this billing-related adjustment, Microsoft is also increasing prices for the following products effective April 1, 2025:
- Microsoft Teams Phone Standard
- Power BI Pro
- Power BI Premium Per User
Aldridge Clients
If you’re an Aldridge client and currently using monthly billing for Microsoft licenses, talk to your Principal Consultant so that they can help you switch to annual billing and lock in your current pricing.