Microsoft Teams Pricing: How Much Does Teams Cost?

How does Microsoft Teams pricing actually work?

Teams is not sold as a standalone product for most business users. It is bundled into Microsoft 365 subscriptions, so the price you pay depends on the plan you choose, the features your staff need, and whether you require calling to and from standard phone numbers. Getting the plan right is a Microsoft 365 security decision as much as a cost one.

For UK businesses, Microsoft 365 is priced per user per month on annual or monthly commitment. List prices are published by Microsoft UK. The tiers that include Teams are:

The prices above are Microsoft's published UK list prices as of 2026, on annual commitment. If you only need chat and meetings, Basic is enough. If staff need installed Word, Excel and Outlook, you need Standard or higher.

What does the free version of Microsoft Teams include?

Microsoft Teams Free is available to anyone with a personal Microsoft account and to small businesses that have not yet committed to a paid Microsoft 365 subscription. It covers chat, audio and video calling, and group meetings, but Microsoft caps free group meetings at 60 minutes per session, per Microsoft's Teams plan comparison.

The free tier provides:

• Chat and group messaging
• Audio and video calling
• Group meetings with a 60-minute limit per session
• 5GB of OneDrive file storage per user
• File collaboration via Office web apps

The free version suits very small teams testing Teams or ad-hoc collaboration. For any business relying on Teams as its primary communication platform, the 60-minute cap and the absence of recording, transcription and scheduling integrations make it unsuitable for daily professional use.

What do you get with Business Basic at £4.60/user/month?

Business Basic is the entry-level paid plan and the cheapest legitimate way to remove the free tier's meeting limit. At £4.60 per user per month it includes the full set of Teams meeting features plus hosted email, but no installed desktop Office software.

Business Basic includes:

• Teams chat and meetings with unlimited duration
• Meeting recording and transcription
• Breakout rooms and webinar hosting
• Exchange Online mailbox (50GB)
• 1TB OneDrive storage per user
• Office web apps (Word, Excel, PowerPoint in the browser)

If your staff need Word, Excel and Outlook installed on their machines, Basic is not enough — you need Standard.

When should you choose Business Standard or Business Premium?

Choose Business Standard (£9.60/user/month) when staff need installed desktop Office apps on up to five devices each. Choose Business Premium (£16.90/user/month) when security matters — it adds Microsoft Defender for Business, Entra ID Premium P1, Intune and Purview data protection on top of everything in Standard.

Business Standard is the most common plan for UK SMEs because it delivers the full Teams experience alongside installed Word, Excel, PowerPoint and Outlook, plus Teams Webinars for external events.

Business Premium is the right plan for businesses handling sensitive data or operating in regulated sectors. Its security tools — including Microsoft Defender for Business — are not available on Basic or Standard, and they remove the need to bolt on separate endpoint protection later.

How much does Teams Phone (calling) cost?

Teams Phone — making and receiving calls to standard telephone numbers — is not included in any Microsoft 365 Business plan by default. You add it through either a Microsoft Calling Plan or Operator Connect, which routes calls through your existing telephony provider inside Teams.

Microsoft's UK domestic Calling Plan costs roughly £8–12 per user per month (market rates as of 2026) depending on whether you take domestic-only or international minutes. Operator Connect pricing varies by provider and is often more cost-effective for businesses with existing SIP trunking or hosted PBX contracts. The technical differences are documented in Microsoft Learn's Teams Phone guidance.

If you are weighing up calling options, our Microsoft Teams calling and Teams Direct Routing pages explain how UK businesses connect Teams to the public phone network. AMVIA configures Teams Phone, calling plans and number porting from your existing provider as part of our business VoIP service.

Is Teams Essentials cheaper than Business Basic?

Teams Essentials sits at roughly £3.40 per user per month and gives longer meetings (a 30-hour maximum) and 10GB storage per user, without the wider Microsoft 365 suite. It is technically cheaper than Basic, but it ships without Exchange email and without Office apps, so most UK businesses find Basic better value.

For the sake of a modest extra cost per user, Business Basic adds a 50GB Exchange mailbox, 1TB of OneDrive storage and the Office web apps. That is why Teams Essentials remains relatively uncommon among UK SMEs — the jump to Basic buys far more than the price difference suggests.

What about enterprise plans E3 and E5?

For larger organisations, Microsoft 365 E3 (£30.20/user/month) and E5 (£47.80/user/month) — 2026 enterprise list prices — provide unlimited Teams usage alongside enterprise-grade compliance, security, analytics and voice features. E5 bundles Teams Audio Conferencing and a Phone System licence, reducing the need for a separate calling add-on.

E5 is rarely the right starting point for a 10–500 staff business. Most organisations that size are better served by Business Premium plus a targeted calling plan than by paying enterprise licence rates for features they will not use. We cover this trade-off on our managed Microsoft 365 service page.

Teams plans compared at a glance

How do you choose the right plan?

For most UK SMEs the real decision is between Business Standard (when staff need installed Office apps) and Business Basic (when web apps are enough). Business Premium wins wherever security is a priority — particularly where staff handle sensitive client data and you want endpoint protection, MFA and device management in one licence.

AMVIA advises on Microsoft 365 licensing as part of our managed service. We review your current licences, flag overspend on unused features, and close gaps in your security posture — so you pay for what your business actually needs. Teams Phone and VoIP sit alongside this through our VoIP for Microsoft 365 service. One provider. Security-first. Microsoft-certified.