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With several Microsoft 365 plans on the market — ranging from personal subscriptions to enterprise-grade business packages — it can be hard to know which one is right for you. The good news is that Microsoft has structured its plans around clear user types, and once you understand what each plan offers, the right choice usually becomes obvious. This guide breaks down every major plan, compares them side by side, and helps you decide based on your specific situation.
Choosing annual billing instead of month-to-month can save you roughly 15–20% per year. For example, Microsoft 365 Personal costs around 6.99/monthonamonthlyplanbutonly 6.99/month on a monthly plan but only ~69.99/year on an annual plan — that’s effectively two months free. If you’re confident you’ll use the subscription long-term, annual billing is almost always the better value.

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Available Plans at a Glance

Microsoft 365 plans fall into two broad categories: personal/family plans for home users, and business plans for organisations. Here’s a high-level overview of each.

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Personal & Family Plans

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Business Plans

In addition to the plans listed above, Microsoft offers Microsoft 365 Education plans for eligible students, teachers, and academic institutions — often at no cost or heavily reduced pricing. There are also Microsoft 365 Government plans for qualifying public sector organisations in the United States. Contact Microsoft or check microsoft.com/education and microsoft.com/government for eligibility details.

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Plan-by-Plan Breakdown

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Microsoft 365 Personal (~6.99/monthor 6.99/month or ~69.99/year)

Microsoft 365 Personal is designed for a single user who wants access to the full suite of Microsoft Office desktop apps on all their personal devices. What you get:
  • Full desktop versions of Word, Excel, PowerPoint, Outlook, OneNote, Publisher (Windows), and Access (Windows)
  • Web and mobile versions of all apps
  • 1 TB of OneDrive cloud storage
  • Installation on up to 5 PCs/Macs, 5 tablets, and 5 smartphones
  • Microsoft Editor (advanced grammar and style checker)
  • Ongoing feature updates at no extra cost
Best for: individuals — students, freelancers, sole traders, or anyone who needs a full Microsoft Office experience on a single account.

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Microsoft 365 Family (~9.99/monthor 9.99/month or ~99.99/year)

Microsoft 365 Family offers everything in Personal, but extends access to up to 6 people — each with their own independent account, storage, and device allowance. What you get (per person):
  • All the same apps as Microsoft 365 Personal
  • 1 TB of OneDrive storage per person (up to 6 TB total for the household)
  • Up to 5 devices per person
  • Parental controls through Microsoft Family Safety app
  • Each member has a completely separate, private account
Best for: households, couples, or families where multiple people need Microsoft 365 independently. At ~9.99/monthforupto6users,theper−personcostworksouttoaslittleas 9.99/month for up to 6 users, the per-person cost works out to as little as ~1.67/month — an exceptional deal compared to buying individual subscriptions.

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Microsoft 365 Business Basic (~$6.00/user/month)

Business Basic is the entry-level plan for organisations. It’s focused on cloud services and communication tools rather than desktop apps. What you get:
  • Web and mobile versions of Word, Excel, PowerPoint, and Outlook (no desktop installs)
  • Microsoft Teams for chat, video calling, and meetings
  • Exchange for business email with a custom domain (e.g. you@yourcompany.com)
  • SharePoint for team sites and intranet
  • 1 TB OneDrive per user
  • Microsoft Forms, Planner, and To Do
  • Up to 300 users
Best for: small businesses or teams where employees primarily work in a browser or on mobile, and don’t need to install full desktop apps locally.

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Microsoft 365 Business Standard (~$12.50/user/month)

Business Standard builds on Business Basic by adding full desktop app installations — making it the most popular choice for small to mid-size businesses. What you get (everything in Basic, plus):
  • Full desktop versions of Word, Excel, PowerPoint, Outlook, OneNote, Publisher (Windows), and Access (Windows)
  • Up to 5 installations per user
  • Microsoft Bookings for appointment scheduling
  • Webinar hosting features in Teams
Best for: businesses where employees need the full Microsoft Office desktop apps, whether for complex spreadsheets, advanced document formatting, or offline access.

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Microsoft 365 Business Premium (~$22.00/user/month)

Business Premium is the most comprehensive plan for organisations that need not just productivity, but advanced security and device management. What you get (everything in Standard, plus):
  • Microsoft Intune for mobile device management (MDM) and mobile application management (MAM)
  • Azure AD Premium P1 for advanced identity and access management
  • Microsoft Defender for Business (endpoint security)
  • Azure Information Protection for data classification and encryption
  • Compliance tools for archiving, eDiscovery, and audit logs
Best for: businesses handling sensitive data, operating in regulated industries, or managing a mix of company-owned and personal devices.

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Which Plan Is Right for You?

Use this decision guide to quickly identify your best fit:

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Frequently Asked Questions

The core difference is the number of users. Microsoft 365 Personal is licensed for one person only — it’s tied to a single Microsoft account. Microsoft 365 Family extends the same benefits to up to 6 people, each with their own separate Microsoft account, their own 1 TB of OneDrive storage, and their own 5-device installation allowance.If it’s just you, Personal is the right choice. If you have a partner, children, or housemates who would also benefit from Microsoft 365, Family is significantly better value — at roughly $3–4 more per month, you’re covering up to six people instead of one.
Yes, you can upgrade or downgrade your Microsoft 365 plan at any time from your Microsoft account services page.
  • Upgrading (e.g. Personal → Family, or Business Basic → Business Standard) takes effect immediately. You’re billed a prorated amount for the remainder of your current billing cycle.
  • Downgrading typically takes effect at the end of your current billing period.
  • Switching from personal to business plans (or vice versa) may require cancelling one subscription and starting another, as they operate on different account types.
Your files and data in OneDrive are not affected by plan changes, though you may lose access to features associated with the higher-tier plan.
Yes — sort of. Microsoft offers free access to the web versions of Word, Excel, PowerPoint, OneNote, and several other apps at office.com with any free Microsoft account. These web apps are genuinely functional for everyday tasks, though they have fewer features than the full desktop versions.What you don’t get for free:
  • Full-featured desktop apps (Windows or Mac)
  • More than 5 GB of OneDrive storage (free accounts get 5 GB)
  • Outlook desktop client
  • Microsoft Teams (free Teams is available separately, with limitations)
If the web apps meet your needs and 5 GB of storage is enough, a free Microsoft account may suffice. For anything more demanding, a paid subscription is worth it.
Not necessarily. Microsoft 365 Personal is perfectly appropriate for sole traders — it gives you the full suite of desktop apps, 1 TB of OneDrive, and Outlook, all at a lower price than any Business plan.You should consider a Business plan if you need:
  • A custom domain email address (e.g. hello@yourbusiness.com via Exchange)
  • SharePoint for a business intranet or document library
  • Microsoft Intune or advanced security features
  • Invoicing or compliance tools tied to a business tenant
Many freelancers and sole traders use Personal or Family plans happily and use a separate email provider for their custom domain. It comes down to whether you need the business-specific services, not the size of your business.
If you cancel your Microsoft 365 subscription, your account doesn’t disappear — but your access changes:
  • Desktop apps enter a reduced-functionality mode. You can open and view files but editing is disabled.
  • OneDrive storage reverts to the free 5 GB tier. If you have more than 5 GB stored, your files are retained for a grace period (typically 30 days for personal plans, 90 days for business) before Microsoft starts deleting files beyond the free limit.
  • Business email (Exchange) stops working if you’re on a Business plan, though your data can be exported.
Before cancelling, download any files stored in OneDrive that exceed the free 5 GB limit, and export any data you need from business services.