Are you trying to decide whether Microsoft Teams is the right collaboration tool for your team? Or perhaps you're wondering if upgrading from the free plan is worth it? Understanding its pricing structure—and how it compares to other tools—can help you make an informed decision and get the most out of your investment.
In this article, I’ll break down Microsoft Teams pricing plans, explain what’s included in each tier, and explore the value they bring to different types of users. Whether you’re a small business owner, part of a growing enterprise, or just need a solution for personal use, I’ll guide you through the options so you can choose the plan that works best for you.
What is Microsoft Teams and why use it?
Microsoft Teams is a collaboration and communication platform developed by Microsoft, 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.
Image source: microsoft.com
One of the key reasons for its popularity is its seamless 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, especially if you’re trying to figure out which plan suits your needs. That’s where this guide comes in!
Here are different Microsoft Teams Plans we’ll cover:
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 365 Business Premium: $22.00 user/month, paid yearly
Microsoft Teams Home Plans
Microsoft Teams (free): $0/month
Microsoft 365 Personal: $9.99/month
Microsoft 365 Family: $12.99/month
See how Lark compares to Microsoft Teams:
Lark vs. Microsoft Teams: Which Communication and Collaboration Tool is Right for Your Business?
Microsoft Teams pricing plans explained
With over 320 million monthly active users, Microsoft Teams offers a range of pricing options, from a robust free plan to enterprise-level subscriptions. Each plan is designed to meet the needs of different users, whether you’re a small team just getting started or a large organization with complex requirements. Let’s take a closer look.
Microsoft Teams Business Plans
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 reliable communication and collaboration tools 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.
10GB 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 (in English) to ensure everyone stays on the same page.
Standard security: Data encryption for meetings, chats, calls, and files ensures your information stays protected.
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 email. 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 versions of Office apps: Access Word, Excel, PowerPoint, and Outlook from anywhere.
1TB of cloud storage per user: Ensure every team member has ample space for files, documents, and backups.
10+ additional business apps: Tools like Bookings, Planner, and Microsoft Forms help streamline operations and boost productivity.
Advanced security: Automatic spam and malware filtering to protect your team’s communications.
This plan is perfect for growing teams that need more professional tools and storage without requiring desktop versions of Office apps.
Microsoft 365 Business Standard: the most popular choice
Priced at $12.50 per user per month (billed annually), the Business Standard plan is the most 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 professional 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 365 Business Premium: enterprise-level features
For $22.00 per user per month (billed annually), the Business Premium plan is designed for larger organizations or teams with advanced security and compliance needs. It includes everything in the Business Standard plan, plus:
Advanced security: Protect sensitive data with advanced threat protection and access control.
Cyberthreat protection: Safeguard your team from phishing, ransomware, and other cyberthreats.
Data and access control: Manage device access and ensure compliance with data protection regulations.
This plan is best for enterprises or teams handling confidential data or operating in industries with strict compliance requirements.
By understanding what’s included in each plan, you can better assess which option aligns with your team’s size, budget, and collaboration needs.
Microsoft Teams 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.
5GB 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.
1TB 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.
6TB of cloud storage: Each person gets 1TB 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 does 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
The free version of Microsoft Teams is perfect for individuals or small groups who need basic collaboration tools. It includes:
Group calling: Host video meetings for up to 60 minutes with up to 100 participants.
Unlimited chats: Stay connected with friends, family, or colleagues through one-on-one and group chats.
Collaborative planning tools: Use tasks and polling to organize events or manage projects.
5GB of cloud storage per user: Share and store files securely in the cloud.
Data encryption: Meetings, chats, calls, and files are protected with standard encryption.
While the free plan is a great way to get started, it does come with limitations that might hinder larger teams or those with more demanding needs:
Meeting duration limits: Group video calls are capped at 60 minutes, which may not be sufficient for longer discussions or workshops.
Storage restrictions: The 5GB per user limit can quickly fill up if your team frequently shares large files.
Limited integrations: Access to advanced integrations with Microsoft 365 apps is restricted, making it less suitable for teams that rely on premium productivity tools.
Why upgrading might be worth it
Paid plans like Essentials, Business Basic, and Business Standard offer several enhancements 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 1TB per user, ensuring your team has ample space for files, documents, and recordings.
Advanced features: Paid tiers unlock tools like meeting recordings, live captions (in English), and transcripts. 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.
When to upgrade
If your team is growing, frequently hosts long meetings, or requires more storage and advanced collaboration tools, upgrading to a paid plan is a smart move. For example:
Essentials is ideal for small teams that need extended meeting durations and more participants.
Business Basic is perfect for teams that need professional email and access to web-based Office apps.
Business Standard is best for teams that rely on desktop Office apps and advanced collaboration tools.
For small teams or casual users, the free plan might be sufficient. Ultimately, the decision depends on how much your team relies on Microsoft Teams for day-to-day operations and whether the additional features of a paid plan align with your needs.
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 generous free plan. 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.
100GB cloud storage: One of Lark’s biggest advantages is its free 100GB cloud storage. In contrast, Microsoft Teams’ free plan offers only 5GB, and even its paid plans have storage limits.
Free plan supports up to 20 users: Lark’s free plan allows up to 20 users, making it a great option for small teams 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 unlimited storage, simpler interfaces, or global collaboration, Lark might be worth exploring.
Hidden costs of Microsoft Teams: what you need to know
While Microsoft Teams offers transparent pricing, there are potential hidden costs that users should consider before committing to a plan. These costs often arise from additional features, integrations, or IT support needs.
Additional Microsoft 365 licenses
If your organization uses Microsoft Teams as part of the Microsoft 365 suite, you’ll need to account for the cost of additional licenses. For example, upgrading to Business Standard or Business Premium plans includes access to desktop versions of Microsoft apps, which can increase overall expenses.
IT management and training
Microsoft Teams is a robust platform, but its complexity can require dedicated IT support, especially for larger organizations. Training employees to use advanced features like integrations, meeting recordings, or compliance tools may also incur extra costs.
Third-party integrations or add-ons
While Microsoft Teams integrates seamlessly with Microsoft 365, adding third-party tools for specific workflows (e.g., CRM software, project management apps) may come with additional subscription fees.
By being mindful of these potential expenses, you can make a more informed decision and maximize the value of Microsoft Teams for your organization—or explore all-in-one tools that offer a seamless experience without additional costs.
Who is Microsoft Teams best for?
Microsoft Teams is a versatile tool that caters to a wide range of users, from small businesses to large enterprises, and even remote teams or educators. Depending on your team’s size, budget, and specific needs, Microsoft Teams offers plans that can fit almost any scenario.
Small businesses
For small businesses, Microsoft Teams provides affordable and accessible collaboration tools. Plans like Essentials and Business Basic are great for teams that need reliable communication, file sharing, and video conferencing without breaking the bank. The Essentials plan, for instance, is perfect for businesses that don’t require the full Microsoft 365 suite but still want a professional platform for meetings and teamwork.
If your team is small but growing, the Business Basic plan offers additional features like 1TB of storage and web access to Microsoft 365 apps, providing more flexibility as your business expands.
Enterprises
Large enterprises often have more complex needs, including advanced security, compliance, and device management. Microsoft Teams’ Business Premium plan is tailored for these requirements, offering enterprise-level features such as advanced data protection and administrative controls. The scalability of Microsoft Teams also makes it a strong fit for large organizations, as it can handle thousands of users while maintaining seamless collaboration.
Enterprises that are already embedded in the Microsoft 365 ecosystem will find Teams particularly valuable for its deep integration with apps like Outlook, SharePoint, and OneDrive.
Remote teams and educators
For remote teams and educators, Microsoft Teams is a powerful tool for staying connected. The free plan is a great option for basic collaboration, offering video conferencing, chat, and file sharing. Educators can use Teams to host virtual classes, share course materials, and collaborate with students in real time.
Paid plans, like Business Basic, add features such as meeting recordings and transcripts, which are especially useful for remote teams needing to document discussions or educators wanting to provide recorded lessons for students to review.
Whether you’re running a small business, managing a large enterprise, or teaching in a virtual classroom, Microsoft Teams has a plan to suit your needs.
Tips for choosing the right Microsoft Teams plan
Here are some tips to help you simplify the choosing process, and make the best decision for your team:
Assess your team’s size and budget
Start by considering the size of your team and how much you’re willing to spend. For small teams or those with limited budgets, the free plan or Essentials plan might be enough. Larger teams or businesses with more demanding needs may benefit from Business Standard or Business Premium.
Evaluate your storage and collaboration needs
If your team frequently shares large files, you’ll want to choose a plan with ample cloud storage. The free plan’s 5GB limit might not be sufficient, so upgrading to a plan like Business Basic (with 1TB per user) can provide the space you need. Additionally, if your team relies heavily on document collaboration, plans that include Microsoft 365 apps will be a better fit.
Consider meeting frequency and duration
For teams that rely on video conferencing, the free plan’s 60-minute meeting cap may not be ideal. Paid plans like Essentials or Business Basic allow for longer meetings and additional features like meeting recordings, making them better suited for teams that host frequent or extended calls.
Think about security and compliance
If your organization handles sensitive information, security should be a top priority. The Business Premium plan offers advanced security features like data loss prevention and device management, which are crucial for protecting your team’s data.
Test the free plan first
If you’re unsure which plan is right for you, start with the free version of Microsoft Teams. It’s a great way to explore the platform’s basic features and determine whether upgrading is worth it for your team.
By taking these factors into account, you can choose a Microsoft Teams plan that aligns with your team’s unique needs and ensures you’re getting the most value for your investment.
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 10GB of storage. Business Basic, on the other hand, includes additional benefits like 1TB of storage and access to web 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 Business Premium plan is 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 a range of pricing plans designed to suit teams of all sizes and industries. From the free plan for individuals and small teams to the feature-rich Business Premium plan for enterprises, there’s something for everyone.
The key to choosing the right plan is understanding your team’s needs. Are you a small business looking for affordable collaboration tools? Or a large enterprise needing advanced security features? Maybe you’re an educator or remote worker seeking a reliable platform for meetings and file sharing. Whatever your situation, Microsoft Teams has options to support your goals.
If you’re just getting started, I recommend trying the free plan to explore the platform’s basic features. Once you’ve identified your team’s requirements, upgrading to a paid plan can unlock additional tools and capabilities to enhance productivity and streamline collaboration.
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 and teams alike.
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