How Much Does Microsoft Teams Cost? Microsoft Teams’ Pricing Explained

Microsoft Teams’ pricing explained

Microsoft Teams’ pricing may seem complicated to some — primarily because it’s divided into 2 categories. 

In total, there are 10 Microsoft Teams plans — 3 in the Home Plans category, 4 in the Business Plans category, and 3 bundle plans in the Teams Phone Bundles category. 

The Home Plans are mostly used by individuals, while the Business Plans are ideal solutions for small and medium-sized companies. 

The Team Phone Bundles category — which includes 4 plans, all of which are a Microsoft Teams Essentials plan with Phone add-ons — is a great solution for teams that need basic Microsoft Teams features with access to various levels of Microsoft Teams Calling features.

Home Plans: Overview

The MS Teams Home Plans include:

• Free Microsoft Teams Plan,
• Microsoft 365 Personal, and
• Microsoft 365 Family. 

These plans are a great pick for individuals, and the Free plan is a good option both for individuals and small businesses that are just starting out.

Take a look at the comparison table below that shows these 3 Microsoft Teams plans and the most important features they offer.

Business Plans: Overview

There are 4 different Business Plans that you can choose from. 

The most popular of all, Microsoft Teams Essentials, costs $4 per user per month (when paid annually) and covers:

• Up to 300 participants per meeting,
• 10 GB of cloud storage per user, and
• 30 hours per meeting.

Here’s a comparison table showing the differences between the Microsoft Teams Essentials plan and the other 3 Business Plans.

Although the 2 tables we prepared for you give you a pretty good insight into the differences between the 7 MS Teams Plans, they don’t really go into detail or cover additional features.

We’ll do that below and, as the Free plan and the 4 Business plans are the most popular options for businesses, we’ll cover everything they have to offer — starting with the Free plan.

Microsoft Teams Free plan

As mentioned, the free option of MS Teams is ideal for small groups or teams that only have video calls from time to time. 

This is even stated on the website, which cites the Free plan as the perfect solution for businesses that need to get started quickly — with secure online meetings, chat, and cloud storage, all in one app, for free.

But what does that include exactly? And what are the limitations of the free plan?

What do you get with the Free plan? 

The free version of Microsoft Teams includes the following:

• Unlimited chats,
• Unlimited 1:1 meetings that can last for up to 30 hours,
• Unlimited group meetings that can last up to 60 minutes,
• Up to 100 participants per meeting,
• Screen sharing and file sharing features,
• 5 GB of storage per user, and
• Customizable backgrounds.

Now, that’s a pretty sizable list, especially when you take into account that the free version is available to users for an unlimited time. 

Granted, it comes up short when compared with some other collaboration and communication apps. 

For example, the free version of Pumble offers 2 times more storage space than MS Teams and unlimited message history — something that isn’t even an option in Microsoft Teams — making it one of the best Microsoft Teams alternatives.

Try Pumble

Aside from that, the MS Teams’ Free plan also has some downsides — let’s take a look.

Free plan limitations

The 3 most significant limitations of the Free plan are:

• Meeting length,
• Free storage, and
• Limited guest users.

In terms of participant capacity, the Free plan allows up to 100 individuals to take part in any single meeting. But, a meeting can’t last longer than 60 minutes. 

Now, depending on the types of meetings you conduct, that might be enough. However, it’s most likely that you won’t be able to go over your entire meeting agenda within the 60-minute limit every time. 

If you want your meetings to have more participants (or last longer), you’ll have to upgrade to one of the paid plans. 

The same goes for storage. With the Free plan, you’re limited to 5 GB of cloud storage per person. Once you go over that, you won’t be able to share documents and files with others.

In addition to this, users of the Free plan also can't use the following functionalities:

• Meeting recording, 
• Scheduling meetings, 
• Phone calls, and 
• Audio conferencing.

Microsoft Teams Essentials plan

Microsoft Teams Essentials is priced at $4 per user per month when paid annually or $4.80 per user per month if you pay monthly. It provides access to the core meeting features of Teams. 

It doesn’t come with the typical Office app bundling, which means you won’t have access to other Microsoft apps such as Word, Excel, Outlook, etc. That functionality costs extra and it’s included in the next, more expensive Microsoft Teams Business Basic Plan. 

But, before we dive deep into that, let’s take a look at what the Essentials plan has to offer.

What do you get with the Essentials plan?

Aside from having all the features included in the Free Plan, if you opt for the Essentials Plan, you’ll also get: 

• Unlimited group meetings for up to 30 hours,
• Up to 300 participants per meeting,
• 10 GB of cloud storage per user, and
• Phone and web support.

There are also integrations with Outlook and Google Calendar — for easy meeting scheduling, always-available chats, and a wide range of meeting features, such as: 

• Virtual backgrounds, 
• Meeting lobby, 
• Together mode, 
• Live closed captions (in English), 
• Collaborative annotations (so meeting attendees can collaborate in real time), and 
• Live reactions. 

It's also possible to assign tasks to teammates, create polls for feedback, and create group chat templates.

Essentials plan limitations

The Essentials plan is a great option for small businesses that want the core features of Microsoft Teams without paying for extras they don’t need. 

However, in the interest of full disclosure, let’s see what the limitations of this plan are.

Microsoft Teams Essentials doesn’t include:

• Identity, access, and user management for all users,
• Live captions in meetings in more than one language (English is the default language), 
• Custom business emails, and
• Advanced support. 

If these “extras” sound like something you might miss, then you might need to look into a more comprehensive plan — like the Microsoft 365 Business Basic Plan.

Microsoft Teams Essentials + Microsoft Teams Calling

As mentioned, there’s an entire category of Microsoft Teams plans that includes the Essentials plans coupled with various features from Microsoft Teams Calling. 

The category includes 3 plans:

• Microsoft Teams Essentials with Phone, which costs $8 per user per month (when paid annually),
• Teams Essentials and Teams Phone with pay-as-you-go calling (country zone 1 - US), which costs $10 per user per month (when paid annually), and
• Teams Essentials and Teams Phone with domestic calling, which costs $16 per user per month (when paid annually).

If talking on the phone is a huge part of your work day, then getting one of these plans might be a good idea. 

As mentioned, all of them include a Microsoft Teams Essentials plan and its features, as well as various degrees of access to Microsoft Teams Calling features, such as:

• Cloud-based phone system,
• Unlimited inbound calling, and
• Call queue, recording, auto attendant, transcription, and transfer between devices.

The cheapest plan doesn’t include a phone number for outbound calling, while the 2 pricier plans do. 

If you already have a subscription to Microsoft Teams Essentials, then you can just get the Phone add-ons.

Microsoft 365 Business Basic plan

Since each tier of Microsoft Teams pricing includes the previous tier’s functionalities, the Microsoft Teams Business Basic plan includes everything the Essentials plan does.

So, the more money you spend, the more (and better) features you get. 

Let’s see what they are.

What do you get with the Business Basic plan?

Business Basic costs $6 per month per user if paid annually, and $7.20 per month per user if paid monthly.

For that money, you’ll get:

• Identity, access, and user management for up to 300 employees,
• 1TB of file storage per user, 
• 10 additional business apps like Bookings, Planner, Microsoft Forms, etc.,
• Anytime phone and web support, and
• Cloud-based versions of Microsoft Office apps including Word, Excel, and PowerPoint.

Business Basic is ideal for teams that want comprehensive web connectivity. Users receive access to a collaboration center that brings together the majority of your organization's resources and staff on one platform.

This plan also includes 24/7 support for any questions, problems, or comments you may have during the use of the app.

Business Basic plan limitations

One of the biggest limitations of the business basic plan is that, although the plan includes Office apps, the offer is quite limited. 

Unlike the Essentials plan, Business Basic has secure cloud services for:

• Teams,
• Exchange,
• OneDrive, and
• SharePoint.

However, the following apps are only available as web and mobile apps:

• Outlook,
• Word,
• Excel, and
• Power Point.

Microsoft 365 Business Standard plan

Business Standard comes after Business Basic and includes everything that the Business Basic plan does (with a few extras, of course). This plan costs $12.50 per user per month if paid annually, or $15 per user per month if paid monthly.

Now, let’s see what that money can get you.

What do you get with the Business Standard plan?

Aside from having access to all previously mentioned amenities, the Business Standard plan also offers the users an opportunity to: 

• Freely share files, as the cloud storage limit is 1 TB per user,
• Host webinars with attendee registration and reporting,
• Create collaborative workspaces via Microsoft Loop,
• Edit videos and access design tools via Clipchamp, and
• Add Copilot as an add-on.

That’s not all, as the Business Standard plan also includes email hosting with a custom email domain, a 50 GB mailbox, and a 150 MB limit for attachments. 

What’s more, the Business Standard license also includes fully installed Office apps on 5 mobile devices, 5 tablets, and 5 PCs or Macs per user, and, unlike the Business Basic plan, Business Standard includes desktop, web, mobile, and secure cloud services for all the apps.

Business Standard plan limitations

Aside from the price — which is double the price of the previous tier — Business Standard also has another limitation and that is that its nature can easily lead to information overload. 

The Business Standard plan is the first one on our list so far that really encompasses the all-inclusive nature Microsoft was going for when they created Teams. But that has drawbacks, as too many available tools can make it hard for users to adopt and use them. 

So, if you’re a small business owner who’s looking for the very best tool for their team, you might be doing your employees a disservice by opting for a plan that includes this many features. 

Unlike some other communication and collaboration tools, Microsoft Teams has a busy and complicated interface — and additional tools and features only make it worse.

Pumble Pro Tip

Feeling overwhelmed with a collaboration tool that’s supposed to make your life easier is the opposite of what most organizations go for. If MS Teams is a bit “too much” for you, take a look at the blog post below to see which apps and tools are the best substitutes for Microsoft Teams:

Top 8 Microsoft Teams Alternatives for 2024

Microsoft 365 Business Premium plan

Finally, the last (but not least) Microsoft Teams pricing plan on our list is the Microsoft 365 Business Premium.

This plan is a cloud-based suite of productivity apps and services with information protection and compliance capabilities included. 

It costs $22 per month per user if you pay everything at once, or $26.4 per user per month if you opt for monthly payments.

Now that’s a steep price, so let’s take a look at whether you’ll get your money’s worth, shall we?

What do you get with Microsoft 365 Business Premium?

Microsoft 365 Business Premium includes everything that the Business Standard plan does, plus:

• Advanced security,
• Access and data control, and
• Cyberthreat protection.

So, the most expensive plan offers additional control and protection, as well as all the services and features that Microsoft Teams has to offer — except the Microsoft Teams Calling feature (you’ll have to pay extra for that).

Is Microsoft Teams the right solution for you?

Picking the right collaboration and communication tool can ensure productive team collaboration — just as picking the wrong one can lead to organizational mayhem.

But the answer to the question “Is Microsoft Teams the right tool for me?” depends on your situation, needs, and budget.

For example, let’s say that you run a 300-person organization and you require a tool that goes beyond a simple conferencing app.

So, you’re looking for something that gives you a lot of control and security, but you’re not sure what to get, so you opt for a Microsoft Teams plan that has the reputation of being “the most popular one” — Microsoft Teams Essentials plan.

300 licenses of the Microsoft Teams Essentials plan come up to $1,200 per month if you pay annually, which means you’ll have to cough up $14,400 on the spot just to have access to Microsoft Teams for a year.

Not to mention, you won’t even get extra control or additional security, as that isn’t included in the Essentials plan.

Does that sound like a lot of money for something that doesn’t even meet all your needs?

That’s because it is. Luckily, there are other options available.

What is Microsoft Teams’ alternative, Pumble?

Pumble is an excellent all-in-one Microsoft Teams alternative. It’s a free group messaging app that allows teams of all sizes to collaborate. 

Unlike MS Teams, Pumble doesn’t put limits on its users — its free plan includes an unlimited number of users and unlimited message history for everyone. 

Aside from that, Pumble allows teams of all sizes to communicate and collaborate via:

• Direct messages, 
• Group messages, threads, and dedicated channels,
• Audio and video calls,
• Audio and video messages,
• File sharing, and
• Video conferencing.

And, to top it off, Pumble also allows external contributors to enter a workspace via guest access. 

Pumble was created as a free app, and it will always offer a free plan — even though it is constantly evolving. 

And the FREE plan is rather generous! 

Unlike Microsoft Teams, which limits the number of users in its free option, Pumble’s FREE plan offers:

• An unlimited number of users,
• Unlimited message history,
• Voice and video messages,
• 1:1 video and audio meetings, 
• 10 GB of storage space, and
• Import and export features.

How do Microsoft Teams and Pumble compare?

One of the most significant differences between Pumble and Microsoft Teams lies in the fact that Pumble offers a stellar free option, while MS Teams is pretty limiting in that regard. 

Take a look at the table below to see how the two compare when it comes to the free options as well as their most popular plans.

As you can see, aside from having a more generous free plan and fewer limitations, Pumble also outperforms MS Teams in the following categories:

• Pumble allows you to manage both users and workspaces, unlike MS Teams.
• Within MS Teams, there is no option to search any file in a specific folder. If you store 50 files in one folder, you have to search through them manually. Pumble allows you to easily search and find all files shared in DMs or channels via the File browser. 
• Pumble chat is very user-friendly, unlike the cluttered, busy one in MS Teams.

Where does Pumble beat Microsoft Teams??

Most importantly, Pumble beats Microsoft Teams in another vital category — the price.

If we go back to the example we gave you before — where you’d have to pay $14,400 for 300 Microsoft Teams Essentials licenses — you’ll see what we mean.

So, if you opt for Pumble instead of Microsoft Teams, you’d probably pick the Pumble PRO plan, since it offers the same things as the Essentials plan does (it even has the same storage limit of 10 GB per seat). 

Pumble’s PRO plan costs $2.49 per user per month (if billed annually), which means that you’d pay $8,964 for the whole year (which is $747 per month) for your team of 300. 

That means you’d save $5,436 or 37.75%. 

And, even if you opted for the more expensive Pumble plan — Pumble BUSINESS — which offers more than the Essentials plan does, you’d still save money. 

Pumble Business costs $3.99 per user per month but it offers features that the Essentials plan doesn’t have:

• Guest access,
• Unlimited integrations, and 
• 20 GB of storage per seat. 

Most importantly, Pumble offers supreme security and support. With a support team that’s available 24/7, Pumble will be there whenever you need them, via:

• Phone,
• Chat,
• Email, and
• Priority customer support (included in both PRO and BUSINESS plans).

Microsoft Teams’ alternative: Pumble — for all your communication and collaboration needs

Microsoft Teams’ is an undeniably comprehensive tool. However, more features don’t always mean a better tool.

What’s more, with such pricey plans, MS Teams might leave you looking for a more affordable alternative.

So, give Pumble, an all-in-one communication and collaboration tool a try! 

With budget-friendly prices, competitive features, and a mission of continuous improvement, Pumble is the next big thing on the market.

Give your team a chance to show you how well they can collaborate with the right tool. Try Pumble for free today!