Microsoft Teams Plans Compared: Free vs Essentials vs Microsoft 365

Microsoft Teams comes in several versions, and the names have changed more than once. Here is what each one gives you today, what it costs in the UK, and which suits a small business.

The options at a glance

All prices are Microsoft’s UK list prices at the time of writing (October 2026), per user per month, excluding VAT, on an annual subscription paid yearly.

Plan	UK price	Group meetings	Cloud storage per user	Business email and Office apps
Teams (free)	Free	Up to 60 minutes, 100 people	5 GB	No
Teams Essentials	£3.10	Up to 30 hours, 300 people	10 GB	No
Microsoft 365 Business Basic	£5.40	Up to 30 hours, 300 people	1 TB	Email, web and mobile apps
Microsoft 365 Business Standard	£10.80	Up to 30 hours, 300 people	1 TB	Email, desktop apps
Microsoft 365 Business Premium	£16.90	Up to 30 hours, 300 people	1 TB	Email, desktop apps, advanced security

Microsoft raised list prices for most Microsoft 365 suites from 1 July 2026. Standalone Teams products weren’t part of that increase. Prices can change, so check Microsoft’s pages (in our sources) before you budget.

Teams (free)

The free version of Teams is aimed at personal use: friends, family and community groups, signed in with a personal Microsoft account. Group meetings stop at 60 minutes, with up to 100 people, and each person gets 5 GB of storage.

It isn’t built for running a business. There’s no business email, no central administration of accounts, and no way to manage who has access to company files when someone leaves. Microsoft itself points businesses to its paid plans.

Teams Essentials

Teams Essentials is Microsoft’s standalone business version of Teams, without the rest of Microsoft 365. For £3.10 per user per month you get:

• Unlimited group meetings of up to 30 hours, with up to 300 people
• Meeting recordings and transcripts
• Unlimited chat, including with guests
• 10 GB of cloud storage per user

What you don’t get is business email, the Office apps, SharePoint for shared company files, or the security and device management tools in the higher plans.

Who it suits: a small company that already has email and documents sorted elsewhere and just wants proper meetings and chat.

Teams with a Microsoft 365 business plan

Every Microsoft 365 business plan includes Teams (unless you choose a “no Teams” version), along with business email, 1 TB of OneDrive storage per person and SharePoint for shared files.

• Business Basic (£5.40) adds email and the web and mobile versions of Word, Excel and PowerPoint. Only £2.30 more than Teams Essentials, and much more useful.
• Business Standard (£10.80) adds the desktop apps.
• Business Premium (£16.90) adds device management and stronger protection against phishing and malware, which matters if you handle client data.

For most companies, this is the right answer: one subscription covers email, files, meetings and chat, all signed in with the same account and managed in one place. Our guide to Microsoft 365 vs Office 365 compares the plans in more detail.

What Teams “unbundling” means in the UK

You’ll now see “(no Teams)” versions of every Microsoft 365 plan. This follows competition complaints in Europe:

• In the EU and EEA, Microsoft started selling its suites without Teams in October 2023. In September 2025 the European Commission accepted legally binding commitments from Microsoft, including selling suites without Teams at a lower price, for seven years.
• In the UK and the rest of the world, Microsoft introduced “no Teams” versions from 1 April 2024. For small business plans (Basic, Standard and Premium), you can still choose the version with Teams or without it. For new customers on enterprise plans (E1, E3 and E5), Teams is now bought separately as Teams Enterprise.

For a small UK business, the practical effect is a choice. Business Basic without Teams is £4.20 rather than £5.40, for example. Unless you’re committed to Zoom, Slack or another tool, keep the version with Teams: it’s cheaper than buying a separate meetings product, and it works with the rest of Microsoft 365.

Add-ons you might see

• Teams Premium (£7.70 per user per month) adds extra meeting and webinar features on top of standard Teams. Most small businesses don’t need it.
• Teams Phone turns Teams into a phone system, but needs a calling plan or a provider to connect it to the phone network. If you’re looking at phones, our business phones page covers the options.

Getting the licences right

Mixing plans is allowed and often saves money: for example, Business Premium for staff handling client data and Business Basic for someone who only needs email and Teams. Our cloud services team can review what you’re paying for, recommend the right plan for each person, and set Teams up so it’s secure from the start. Once you’ve chosen, our Teams setup checklist will help you get it organised.