The price depends on which version you pick and whether you buy it monthly or yearly

Microsoft 365 subscriptions range from about $7 per month for a single person to $20 per month for a family plan, or you can pay yearly and save roughly 15 to 20 percent. The most common choice for home users is Microsoft 365 Personal ($70 per year or $6.99 per month) or Microsoft 365 Family ($100 per year or $9.99 per month). Business plans start at $6 per month per person and go up from there depending on what features your workplace needs.

The price you pay determines what you get: how many devices you can use it on, whether you get cloud storage, and which programs are included. A cheaper subscription might cover Word, Excel, and PowerPoint on one device. A family plan covers up to six people, each on up to five devices, plus 1 terabyte of cloud storage per person. If you only need one or two programs, or you do not use them often, you might pay less by buying the programs outright instead of subscribing.

Key Takeaways

  • Microsoft 365 Personal costs $70 per year and covers one person on up to five devices with Word, Excel, PowerPoint, Outlook, and 1 terabyte of cloud storage.
  • Microsoft 365 Family costs $100 per year and covers up to six people, each on up to five devices, with the same programs and 1 terabyte of storage per person.
  • Monthly payments cost about 15 to 20 percent more than paying for a full year upfront.
  • If you only use one or two programs occasionally, buying them outright (Word, Excel, or PowerPoint as standalone purchases) may cost less over time than a subscription.
  • Business plans vary widely in price and features depending on the size of your organization and which tools you need.

Personal and family plans: what the monthly and yearly prices are

Microsoft 365 Personal is designed for one person and costs $70 per year or $6.99 per month. You get Word, Excel, PowerPoint, Outlook, OneNote, Access, and Publisher. You can install it on up to five devices at the same time — for example, a desktop computer, a laptop, and a tablet — and use it on all of them. You also get 1 terabyte of OneDrive cloud storage, which is enough for roughly 200,000 photos or 500 hours of video, depending on file size.

Microsoft 365 Family costs $100 per year or $9.99 per month and covers up to six people in your household. Each person gets their own account, their own 1 terabyte of cloud storage, and can install the programs on up to five devices. So a family of four could have the software on 20 devices total (four people times five devices each). If you have children who use computers for schoolwork, or multiple adults in the house, the family plan usually costs less per person than buying Personal subscriptions for each of them.

If you pay monthly, you will spend about $84 per year for Personal ($6.99 times 12) instead of $70, or about $120 per year for Family ($9.99 times 12) instead of $100. Paying yearly saves you roughly $14 on Personal and $20 on Family. Some retailers occasionally offer discounts on yearly subscriptions, particularly around back-to-school season or the winter holidays, so it is worth checking before you buy.

Business plans: pricing varies by company size and what you need

Microsoft 365 for business is not one price — it depends on how many people work for you and which tools you need. The smallest plan, Microsoft 365 Business Basic, costs $6 per person per month and includes web versions of Word, Excel, and PowerPoint, plus email and video meetings through Teams. Business Standard adds the desktop versions of the programs and costs $12.50 per person per month. Business Premium, at $22 per person per month, includes everything plus security and device management tools.

Larger organizations often use Microsoft 365 Enterprise plans, which are priced per person per month but require a commitment to a certain number of licenses. These plans start around $20 per person per month and go up to $55 per person per month depending on which version you choose and what add-ons you need. A business with 50 employees on Business Standard would pay roughly $7,500 per year total ($12.50 times 50 people times 12 months).

Most small businesses work with a reseller or managed service provider who handles the subscription for them, rather than buying directly from Microsoft. This can sometimes reduce the cost through volume discounts, but it also means you are paying for someone to manage the account. If you run a very small business — just you, or you and one or two employees — Microsoft 365 Business Basic is usually the cheapest way to get email, cloud storage, and the Office programs together.

What you get for the money: programs, storage, and device limits

The programs included in your subscription are the same across Personal and Family plans: Word, Excel, PowerPoint, Outlook, OneNote, Access, and Publisher. The difference is how many people can use them and on how many devices. Personal covers one person on five devices. Family covers six people, each on five devices. Both include 1 terabyte of OneDrive storage, though Family gives you that storage per person rather than shared.

All subscriptions include access to the web versions of Word, Excel, and PowerPoint, which you can use in any browser without installing anything. The desktop versions — the programs you read and install on your computer — are only included if you have an active subscription. If your subscription expires and you do not renew, you can still open and read files you created, but you cannot edit them. You can view them in read-only mode, or you can convert them to an older format like .docx or .xlsx to use in free tools.

OneDrive cloud storage is included with every subscription. Personal and Family plans give you 1 terabyte per account. Business plans include 1 terabyte per person on Business Basic and Standard, and 1 terabyte per person on Enterprise plans as well, though Enterprise customers can request more. If you run out of storage, you can buy additional storage separately, or you can delete files you no longer need.

When buying the programs outright costs less than subscribing

Microsoft also sells Word, Excel, and PowerPoint as standalone purchases instead of subscriptions. You buy them once and own them forever — you do not have to pay every month or year. A standalone copy of Microsoft Office (which includes Word, Excel, and PowerPoint) costs around $160 to $170 depending on where you buy it. This is a one-time cost, not a recurring one.

If you use the programs regularly, a subscription is usually cheaper. Microsoft 365 Personal at $70 per year is less than half the cost of buying Office outright. But if you only use Word occasionally to write a letter or edit a resume, or if you use Excel once or twice a year, buying it once might make more sense than paying $70 every year for something you barely touch. The same is true if you only need one program — you cannot buy Word alone as a standalone purchase, but you can use the free web version or a free alternative like Google Docs.

Standalone Office is also the right choice if you want to use the same copy on more than five devices, or if you want to share it with more than one person without paying for multiple subscriptions. Once you buy it, you own it, and you can install it on as many of your own devices as you want. You cannot share it with other people, but you do not have to worry about a subscription expiring or your payment method failing.

Free and cheaper alternatives if you want to avoid a subscription

If you do not want to pay for Microsoft 365, you have options. Microsoft Office Online (the web versions of Word, Excel, PowerPoint, and OneNote) is free if you have a Microsoft account. You can create documents, spreadsheets, and presentations in any web browser, and they are saved to your OneDrive automatically. You cannot do everything the desktop versions can do — some advanced features are missing — but for basic writing, math, and presentations, the web versions work fine.

Google Docs, Sheets, and Slides are also free and work in any browser. They are simpler than Microsoft Office, but they handle most everyday tasks. If you need to share documents with other people and have them edit at the same time, Google's tools are often easier to use than Microsoft's. LibreOffice is a free program you can read and install on your computer; it reads and writes Microsoft Office files, though the formatting sometimes shifts slightly when you switch between them.

The trade-off with free tools is that you get less cloud storage (Google gives you 15 gigabytes free, which is 15 times smaller than the 1 terabyte in a Microsoft 365 subscription), fewer advanced features, and sometimes a slower or less polished experience. But if you write documents, build straightforward spreadsheets, or make occasional presentations, free tools can do the job without paying anything.

How to decide between monthly and yearly payments

Paying yearly saves you money — roughly 15 to 20 percent compared to paying month by month. If you know you will use Microsoft 365 for at least a year, paying upfront is the better deal. If you are not sure whether you will stick with it, or if you want to try it before committing, monthly payments let you cancel anytime without losing money on unused months.

Monthly subscriptions renew automatically on the same day each month. If you forget to cancel before the renewal date, you will be charged again. Yearly subscriptions also renew automatically, but only once a year, so there is less chance of an unexpected charge. You can turn off auto-renewal in your Microsoft account settings at any time, and your subscription will continue until the end of the paid period.

If you are buying for a business, yearly payments are almost always cheaper, and many businesses set up auto-renewal so they do not have to remember to renew manually. For personal use, the choice depends on whether you want to save money (yearly) or keep your options open (monthly).

Frequently Asked Questions

Can I use the same Microsoft 365 subscription on my phone, tablet, and computer?

Yes. Personal and Family plans let you install the programs on up to five devices per person, and you can mix device types — phone, tablet, laptop, desktop, whatever you want. You just need to sign in with the same Microsoft account on each device. If you have a Family plan, each of the six people can have their own five devices.

What happens to my files if my subscription expires?

Your files stay in your OneDrive cloud storage, and you can still open and read them. You cannot edit them in the desktop versions of Word, Excel, or PowerPoint anymore, but you can view them in read-only mode or read them and edit them in a free tool like Google Docs or LibreOffice. Your files do not disappear when your subscription ends.

Is Microsoft 365 the same as Microsoft Office?

No. Microsoft Office is the older name for the programs (Word, Excel, PowerPoint, etc.). Microsoft 365 is a subscription that includes those programs plus cloud storage, email, and other services. You can also buy the Office programs without a subscription as a one-time purchase, but that version does not include the extra services or automatic updates.

Can I share a Family plan subscription with people who do not live in my house?

Technically, yes — Microsoft does not verify that people live together. But the Family plan is designed for household members, and Microsoft's terms of service say it is for people in the same household. If you want to share with people outside your home, you would need separate Personal subscriptions for each person, or a business plan if it is for work.

Do I need Microsoft 365 if I only use Word?

Not necessarily. If you only use Word occasionally, the free web version (Office Online) works fine. If you want the desktop version and only need Word, you could buy it as a standalone program, though Microsoft does not sell Word by itself anymore — you have to buy the full Office suite. For most people who only need one program, the free web version or a free alternative like Google Docs is the cheapest option.