Are you trying to decide whether Microsoft Teams is the right videoconferencing tool for your team? Or perhaps you're wondering if upgrading from the free plan is worth it? With so many different plans available, for individuals and businesses, Microsoft Team's can be tricky to decipher.
In this article, we'll break down the pricing plans, explain what’s included in each tier, and explore the value they bring to different types of users. Whether you’re a SME owner, part of a growing enterprise, or just need a solution for personal use, this guide will help you find a plan that works best for you.
What is Microsoft Teams and why use it?
Microsoft Teams is a collaboration and communication platform designed to help teams stay connected, organized, and productive. Launched in 2017, it has quickly become a go-to tool for businesses, schools, and remote teams worldwide.
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One of the key reasons for its popularity is its integration with Microsoft 365 (formerly Office 365). If you’re already using apps like Word, Excel, PowerPoint, or Outlook, Microsoft Teams acts as a central hub where you can collaborate on files, schedule meetings, and communicate—all in one place.
But it’s not just about integration. Microsoft Teams offers a variety of features that cater to different needs, including:
Instant messaging and team chats: Keep conversations organized with channels and threads.
Video conferencing: Host virtual meetings, webinars, or online classes with ease.
File sharing and collaboration: Store, share, and co-edit files in real time.
Task and project management: Use built-in tools to assign tasks, set deadlines, and track progress.
Its versatility makes it a great choice for different audiences, from small businesses and large enterprises to educators and non-profits. However, its pricing structure can be a bit confusing, so here is a quick breakdown:
Microsoft Teams Business plans
Microsoft Teams Essentials: $4.00 user/month, paid yearly
Microsoft 365 Business Basic: $6.00 user/month, paid yearly
Microsoft 365 Business Standard: $12.50 user/month, paid yearly
Microsoft Teams Enterprise plans
Microsoft Teams Enterprise: $0/month
Microsoft 365 E3 (no Teams): $33.75/month
Microsoft 365 E5 (No Teams): $54..75/month
Microsoft Teams Home plans
Microsoft Teams (free): $0/month
Microsoft 365 Personal: $9.99/month
Microsoft 365 Family: $12.99/month
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
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Microsoft Teams Essentials: Affordable collaboration for small teams
At $4.00 per user per month (billed annually), the Microsoft Teams Essentials plan is an excellent entry-level option for small teams or businesses that need only need a videoconferencing software without the complexity of the full Microsoft 365 suite. Key features include:
Extended meeting times: Host group meetings for up to 30 hours with a maximum of 300 participants.
10 GB of cloud storage per user: Ample space for file sharing and collaboration.
Real-time collaboration tools: Share files, assign tasks, and conduct polls seamlessly.
Meeting recordings and live captions: Record meetings with transcripts and live captions (English only) to ensure everyone stays on the same page.
Standard security: Data encryption for meetings, chats, calls, and files ensures your information stays protected.
AI-powered assistance: Basic grammar and style suggestions.
This plan is ideal for small businesses or teams looking for an affordable solution to manage meetings and collaboration without needing access to advanced Microsoft 365 tools.
Microsoft 365 Business Basic: More features for growing teams
For $6.00 per user per month (billed annually), 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 emails. Key features include everything in the Essentials plan, plus:
Custom business email: Use a professional email address (e.g., you@yourbusiness.com) to enhance your brand.
Web and mobile apps for collaboration: Access Word, Excel, PowerPoint, Outlook, Planner, and more from anywhere.
1 TB of cloud storage per user: Ensure every team member has ample space for files, documents, and backups.
Advanced security: Automatic spam and malware filtering to protect your team’s communications.
Breakout rooms: Allow users to have separate discussions in a video or audio call.
AI-powered assistance: Create custom chatbots and get the latest web information with AI.
This plan is perfect for growing teams that need more professional tools and storage without requiring desktop versions of Office apps, and only the web and mobile versions are available.
Microsoft 365 Business Standard: Popular choice for midsize businesses
Priced at $12.50 per user per month (billed annually), the Business Standard plan is a popular choice for mid-sized businesses or teams that rely heavily on Microsoft 365 apps. It includes everything in the Business Basic plan, plus:
Desktop versions of Office apps: Download and use Word, Excel, PowerPoint, and Outlook offline for maximum flexibility.
Webinars and reporting tools: Host webinars with attendee registration and reporting features.
Collaborative workspaces: Use Microsoft Loop to co-create and manage projects in real time.
Video editing and design tools: Create professional videos and designs with Clipchamp.
This plan is ideal for teams that need robust tools to manage projects, collaborate effectively, and host professional events.
Microsoft Teams Enterprise plans
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Microsoft Teams Enterprise: Affordable solution for enterprises
Priced at $5.25 per user per month (billed annually), the Microsoft Enterprise plan is an entry-level option for big companies. This plan is essentially the same as the Essentials plan above, but the limit for meeting participants is increased to 1,000, instead of 300.
Microsoft 365 E3 and E5: Advanced enterprise solutions for collaboration
Microsoft Teams is actually not included in these two enterprise plans, so a separate Teams license is required. Instead, apps and services included are collaboration tools, such as Word, Excel and Sharepoint, as well as OneDrive and Windows 11. The two plans also come with cloud storage of 1-5+ TB per user, security and identity management, and more advanced AI assistance.
Microsoft Teams Home plans
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Teams features for all the Home plans are not as extensive as the Business and Enterprise plans. For example, whiteboard and collaborative annotations, breakout rooms, and webinar hosting aren't available on any of the Home plans.
Microsoft Teams Free
If you’re just starting out or need a basic collaboration tool for personal use, the free version of Microsoft Teams might be all you need. It includes essential features like:
Group calling: Host video meetings for up to 60 minutes with up to 100 participants.
Unlimited chat: Stay connected with friends and family through unlimited one-on-one and group chats.
Collaborative planning tools: Use tasks and polls to organize events, plan projects, or coordinate activities.
5 GB of cloud storage: Share and store files securely in the cloud.
Data encryption: Meetings, chats, calls, and files are protected with standard encryption.
The free plan is perfect for individuals, families, or small groups who need a simple and secure way to stay connected. However, it does come with limitations, such as shorter meeting durations and limited storage, which may not be ideal for larger groups or those with more demanding needs.
Microsoft 365 Personal
For individuals who need more advanced tools and features, the Microsoft 365 Personal plan is a great upgrade at $9.99 per month (or $99.99 per year). It includes everything in the free plan, plus:
Extended group calling: Host meetings for up to 30 hours with up to 300 participants.
Desktop apps: Access premium versions of Word, Excel, PowerPoint, Outlook, and OneNote, complete with Microsoft Copilot for enhanced productivity.
1 TB of cloud storage: Store and share files securely with ample space for personal use.
Ad-free email and calendar: Manage your email, calendar, and contacts in one place without interruptions.
Creative tools: Enjoy advanced tools for writing, design, and graphics, along with grammar, spelling, and editing support.
Ongoing technical support: Get help whenever you need it for the duration of your subscription.
Live captions: Meetings include live captions (in English) for better accessibility.
This plan is ideal for individuals who want to combine collaboration tools with premium productivity apps and additional storage.
Microsoft 365 Family
For families or households with multiple users, the Microsoft 365 Family plan offers incredible value at $12.99 per month (or $129.99 per year). It includes everything in the Personal plan, but with benefits for up to six people:
Extended group calling: Host meetings for up to 30 hours with up to 300 participants.
Desktop apps for everyone: Each user gets access to premium versions of Word, Excel, PowerPoint, Outlook, and OneNote, complete with Microsoft Copilot.
6 TB of cloud storage: Each person gets 1 TB of storage, ensuring everyone has plenty of space for their files.
Ad-free email and calendar: Manage email, calendars, and contacts without distractions for all family members.
Creative and productivity tools: Enjoy advanced writing, design, and editing tools for every user.
Ongoing technical support: Get expert help for any issues during the subscription period.
Access to updates and new features: Stay up to date with the latest tools and enhancements.
This plan is perfect for families or households that want to share premium tools and storage while keeping individual accounts and privacy intact.
Microsoft Teams free vs paid plans: is it worth upgrading?
When deciding between the free and paid versions of Microsoft Teams, the key question is: what do you or your team need? While the free plan is a fantastic starting point, upgrading to a paid plan can unlock advanced features that significantly enhance productivity and collaboration.
What you get with the free plan
Choosing between the free and paid versions of Microsoft Teams depends on your usage. The free tier offers handy basic features—screen sharing, polling, and unlimited chat—which is helpful for getting started. However, the 1 user restriction, 60-minute video call limit, and 5 GB storage make it most suitable for personal use.
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.
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.
How does Microsoft Teams compare to 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: which is better for meetings?
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 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.
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.
FAQs about Microsoft Teams pricing
Is Microsoft Teams free?
Yes, Microsoft Teams offers a free plan that includes essential features like video conferencing, chat, and file sharing. It’s a great starting point for individuals or small teams.
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.
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.
