Most businesses choose their Microsoft 365 plan once, in a hurry, during setup, and then pay for that thirty-second decision every month for years. The differences between Business Basic, Standard and Premium look like a pricing table; in practice they decide whether your staff get desktop Office, whether your devices are manageable, and whether a chunk of your security exists at all.
This comparison covers what each plan actually contains, the 2026 UK prices (which changed in July), and the detail most businesses miss: you do not have to pick one plan for everyone. Getting the mix right is routinely worth hundreds of pounds a month to a 25-person business, in one direction or the other.
The three plans in one view
All three Business plans include the core cloud services: Exchange email with 50GB mailboxes, Teams, 1TB of OneDrive per user, SharePoint, and web and mobile versions of Word, Excel, PowerPoint and Outlook. They share a ceiling too: Business plans max out at 300 users, after which Enterprise plans take over.
What separates them:
Business Basic
Email, Teams, cloud storage and the web and mobile Office apps only: no installable desktop Word or Excel. Basic suits roles that live in a browser, frontline staff who mainly need email and Teams, and businesses genuinely comfortable working in web apps. The most common Basic mistake is optimism: buying it for staff who then spend two years fighting the web version of Excel.
Business Standard
Everything in Basic plus the full desktop Office applications on up to five devices per user, along with extras like webinar hosting in Teams. Standard is the default plan for office-based work, and correctly so: if a person’s day involves real spreadsheet or document work, the desktop apps pay for the difference quickly.
Business Premium
Everything in Standard plus the security and management layer, and this is where the plan comparison stops being about apps: Intune for device management and remote wipe, Entra ID Plan 1 for conditional access, Defender for Office 365 for advanced phishing and attachment protection, Defender for Business endpoint security, and information-protection tooling. Premium is not “Standard with extras”; it is Microsoft’s SME security stack sold as a licence tier.
2026 UK pricing (changed 1 July)
Microsoft raised UK prices for new and renewing subscriptions from 1 July 2026. On annual billing, ex VAT, the published annual per-user prices and their monthly equivalents:
- Business Basic: £64.80 per year (about £5.40/user/month), up 17%
- Business Standard: £129.60 per year (about £10.80/user/month), up 13%
- Business Premium: £202.80 per year (about £16.90/user/month), unchanged
Two footnotes that matter. First, these are the annual-commitment rates, the cheapest route; month-to-month flexibility costs more. Second, existing subscriptions move to the new prices at renewal, so if your renewal is approaching, the timing is worth a conversation. Notice what Microsoft did with the increases: Basic and Standard rose while Premium held, deliberately narrowing the gap to the secure tier.
The real decision: Premium or not
For most SMEs the interesting question is not Basic versus Standard (job roles answer that) but whether to pay roughly £6 more per user for Premium. Three ways to think about it:
If you buy security separately, compare totals. Businesses on Standard often bolt on third-party endpoint protection, a device-management tool and email security. Priced individually, those commonly exceed the £6 gap, which makes Premium a consolidation saving rather than a cost.
If clients or insurers are asking questions, Premium answers several. The controls Premium provides (conditional access, managed devices, advanced phishing protection) map directly onto what Cyber Essentials requires and what cyber insurers now ask about at renewal. The current question set’s strict MFA enforcement is far easier to evidence with Entra conditional access than with per-app improvisation.
If nobody manages it, no tier saves you. Premium’s security features do nothing while unconfigured, and Microsoft ships them off by default. A worrying share of the businesses we audit pay for Premium and run it as if it were Basic with desktop apps. The licence is the ingredient, not the meal; our M365 security best practices guide covers what switching it all on involves.
Mixing plans: the part most businesses miss
Licences are assigned per user, and nothing requires uniformity. A sensible 25-person business might run: Premium for the leadership team and finance (highest-value targets), Standard for office staff who need desktop apps, and Basic for workshop or field staff who need email and Teams on a phone. That mix costs materially less than blanket Premium while putting the protection where the risk is.
The audit direction matters too. Unused licences, ex-staff still licensed, and everyone-on-Premium-because-it-was-easier are the classic forms of Microsoft 365 waste; a licence review typically trims 15 to 30% of spend. Our licence audit guide shows how to run one.
What none of the plans include
Two omissions surprise businesses regularly. First, backup: Microsoft’s shared-responsibility model means M365 retains and replicates your data but does not back it up in the recover-anything-from-any-point sense; deleted or ransomware-encrypted content can pass beyond recovery. That is why third-party M365 backup exists. Second, administration: someone still has to configure security, manage users and untangle sharing permissions; the licence fee buys the platform, not the running of it. Both belong in your real cost of Microsoft 365, whichever plan you choose. Our Microsoft 365 service covers the running-it part.
Frequently asked questions
What’s the difference between Business Standard and Business Premium?
Apps are identical; Premium adds the security and management layer: Intune device management, conditional access, Defender for Office 365 and endpoint protection. You are buying security, not features.
How much is Microsoft 365 for a business in the UK?
From July 2026, on annual billing ex VAT: roughly £5.40 per user monthly for Basic, £10.80 for Standard and £16.90 for Premium, with monthly-flexibility billing costing more. A mixed estate usually lands between the Standard and Premium rates per head.
Can we mix Basic, Standard and Premium licences?
Yes, freely, per user, and most businesses should. Match the plan to the role: desktop-app users get Standard or above, high-risk roles get Premium, browser-only roles get Basic.
Is Business Premium worth it for a small business?
If you would otherwise buy endpoint protection, device management or advanced email security separately, usually yes on cost alone, and the compliance evidence is a bonus. If nobody will configure it, fix that first; unconfigured Premium is expensive Standard.
What happens when we hit 300 users?
Business plans cap at 300 seats. Beyond that, Enterprise (E3/E5) plans apply, with their own security bundles and pricing. Businesses approaching the cap should plan the transition rather than discover it.
Do Microsoft 365 plans include backup?
No. Retention and recycle bins are not backup; point-in-time recovery of mail, files and Teams data needs a third-party backup service, which we treat as standard on managed estates.
Get the mix right once
Ten minutes with your licence list usually finds money: wrong tiers, unused seats, security paid for but switched off. That review is part of our free IT health check, alongside everything else in your setup, with a per-user monthly price if you want the whole thing managed. Get in touch before your next renewal date, not after it.
