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 two categories. 

In total, there are 7 Microsoft Teams plans — 3 in the Home Plans category and 4 in the Business Plans category. 

Individuals mostly use the Home Plans, while the Business Plans are ideal solutions for small and medium-sized companies.

Home Plans: Overview

The MS Teams Home Plans include:

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

These plans are a good choice for individuals, and the Free plan is a nice option for individuals and small businesses 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 offer:

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

The comparison table below shows the differences between the Microsoft Teams Essentials plan and the other 3 Business Plans.

Although the two tables we prepared give a pretty good insight into the differences between the 7 MS Teams Plans, they don’t 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 MS Teams option is designed for small groups or teams that only have video calls from time to time and 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? 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.

The free version is available to users for an unlimited time.

Granted, it comes up short compared to other collaboration and communication apps.

For example, the free version of Pumble — the all-in-one communication app for teams — offers substantially more. Pumble has two 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.

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

Free plan limitations

The 3 most significant limitations of the Free plan are:

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

The Free MS Teams plan lets you host up to 100 individuals in any single meeting. However, a meeting can’t last longer than 60 minutes.

Now, that might be enough depending on the types of meetings you conduct. Still, it’s most likely that you won’t be able to review your 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. The Free plan limits you 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, if you’re on the Free plan, you 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 paid monthly. This plan gives you access to the core meeting features of Teams.

It doesn’t come with the typical Office app bundling, so you won’t get 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 look at what the Essentials plan offers.

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.

Integrations with Outlook and Google Calendar are also available for easy meeting scheduling, as well as chats and a wide range of meeting features, such as:

• Virtual backgrounds, 
• Meeting lobby, 
• Together mode (bringing participants together virtually into a shared space)
• 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 good option if you’re a small business and want the core features of Microsoft Teams without paying for extras you 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), 
• Breakout rooms in meetings,
• Custom business emails, and
• Advanced support. 

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

Microsoft 365 Business Basic plan

Each tier of Microsoft Teams pricing includes the previous tier’s functionalities. Therefore, 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 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
• Web and mobile versions of Microsoft Office apps, including Word, Excel, and PowerPoint.

Business Basic is made for teams that want comprehensive web connectivity. Users receive access to a collaboration center that brings together most 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 while using the app.

Business Basic plan limitations

One of the most significant limitations of the business basic plan is that although the plan includes Office apps, the offer is 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 the Business Basic plan does (with a few extras). 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 (AI tool) as an add-on.

That’s not all, as the Business Standard plan also includes email hosting with a custom email domain and a 1 TB 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: its nature can easily lead to information overload. 

The Business Standard plan is the first on our list so far that encompasses the all-inclusive nature Microsoft was going for when they created Teams. However, that naturally also 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 looking for the best tool for your team, you might be doing your employees a disservice by opting for a plan that includes this many features.

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

Pumble Pro Tip

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:

8 Microsoft Teams Alternatives to Try in 2025

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 $26.40 per user per month if you opt for monthly payments.

Now, that’s a steep price, so let’s 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 and all the services and features that Microsoft Teams has to offer.

The only obvious downside of this plan is the pretty steep price you’ll have to pay, especially if you run a large business.

Is Microsoft Teams the right solution for you?

Picking the right collaboration and communication tool can ensure productive team collaboration — just as choosing 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 require a tool beyond a simple conferencing app.

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

Three hundred 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 team collaboration software that allows teams of all sizes to communicate and work together.

Unlike MS Teams, Pumble doesn’t limit its users — its free plan includes unlimited 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.

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

Pumble was created as a free app and 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:

• Unlimited users,
• Unlimited message history,
• Voice and video messages,
• 1:1 video and audio meetings, 
• Up to 3 integrations
• 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 is that Pumble offers a stellar free option, while the MS Teams one is pretty limited. 

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.
• MS Teams has no option to search any file in a specific folder. If you store 50 files in one folder, you must manually search through them. Pumble lets you 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 triumphs over 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 (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.

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

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

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.