Microsoft 365 is a monthly or yearly subscription that gives you access to Office apps, cloud storage, and email

Microsoft 365 (formerly called Office 365) bundles Word, Excel, PowerPoint, Outlook, and other productivity tools into a single subscription you pay for regularly. You do not own the software — you rent access to it. When you stop paying, you lose access to the apps and your files stored in the cloud, though you can usually download them first.

The service includes OneDrive cloud storage, which means your documents sync across devices and you can access them from anywhere with an internet connection. It also includes Outlook email and calendar, Teams for video calls and messaging, and access to Microsoft's online versions of Office apps that work in any web browser.

Microsoft offers different subscription tiers aimed at different users: personal plans for individuals, family plans that cover up to six people, and business plans for companies. The price, storage amount, and features change depending on which tier you choose.

Key Takeaways

  • Microsoft 365 requires a monthly or annual payment; you do not buy the software outright, and access ends when your subscription ends.
  • Personal and family plans cost between roughly $70 and $100 per year for basic versions, with higher-tier options available at greater cost.
  • All plans include OneDrive storage, Outlook email, and the full desktop versions of Word, Excel, and PowerPoint on Windows and Mac.
  • You can use Microsoft 365 on multiple devices at once, but the number of devices allowed depends on which plan you purchase.

Personal plans versus family plans

A personal plan covers one person on one device at a time. You get 1 TB of OneDrive storage, the full Office desktop apps, and Outlook email. This plan is meant for someone who works on a single computer or tablet and does not need to share access with others.

A family plan covers up to six people in one household, each with their own account and storage. Each person gets 1 TB of OneDrive storage, and everyone can install the apps on their own devices. Family plans cost more per month or year than personal plans, but the per-person cost is lower if you have multiple users. You manage the family group through a Microsoft account, and you can remove or add members at any time.

Business and enterprise subscriptions

Microsoft offers separate subscription tiers for small businesses, larger companies, and enterprises. These include Microsoft 365 Business Basic, Business Standard, and Business Premium, each with different combinations of apps, storage, and security features. Business plans also include tools like Microsoft Teams for team communication and SharePoint for document sharing across a company.

Enterprise plans are customized and priced per user. They include advanced security, compliance tools, and support for large organizations with hundreds or thousands of employees. If you work for a company, your employer may already pay for your Microsoft 365 subscription as part of your job.

What is included in the subscription

All Microsoft 365 plans include the desktop versions of Word, Excel, PowerPoint, and Outlook for Windows and Mac. You also get the web versions of these apps, which work in any browser without needing to install anything. The web versions have fewer features than the desktop versions but are useful for quick edits or when you are away from your main computer.

OneDrive cloud storage comes with every plan. Personal and family plans include 1 TB per person. Business plans vary, but typically start at 1 TB and can be increased. Cloud storage means your files are backed up automatically and you can access them from any device.

Microsoft 365 also includes Outlook email and calendar, Microsoft Teams for video calls and group messaging, and access to Microsoft's online templates and design tools. Some plans include Publisher (a desktop publishing app) and Access (a database tool). Family plans include Minecraft Education Edition and family safety features that let parents monitor and control children's device use.

How many devices you can use

Personal plans let you install Microsoft 365 on one device at a time. If you want to use it on a second device, you must uninstall it from the first or purchase a second subscription. You can sign in to the web versions of the apps on as many devices as you want, but only one device can have the desktop apps installed at a time.

Family plans let each of the six members install the apps on up to five devices each. This means one person in the family can have Word on their laptop, tablet, and phone all at once. The total across all family members can be much higher — up to 30 devices if all six members use the maximum.

Cost and payment options

Microsoft 365 personal plans typically cost between $70 and $100 per year, depending on promotions and your region. Family plans cost roughly $100 to $130 per year. These prices are for the standard tier; Microsoft also sells premium versions with additional features at higher prices.

You can pay monthly or annually. Annual payment is usually cheaper per month than paying month-to-month. Microsoft charges your payment method automatically each billing period unless you cancel the subscription. You can cancel at any time, though if you paid for a full year upfront, you may not receive a refund for the unused portion — check Microsoft's refund policy for your region.

Microsoft frequently runs promotions, especially around back-to-school season and the winter holidays. If you are a student or educator, you may be able to get Microsoft 365 at a discount through your school.

Free alternatives and when to consider them

Microsoft offers free web versions of Word, Excel, PowerPoint, and Outlook at Office.com if you have a Microsoft account. These are limited compared to the paid versions — they have fewer features and less storage — but they are genuinely free and do not require a subscription. You get 5 GB of OneDrive storage instead of 1 TB.

Google Workspace (Gmail, Google Docs, Google Sheets, Google Slides) is another free alternative, though the free version also has storage limits. LibreOffice is free, open-source software you download and install on your computer; it works offline and does not require a subscription, but it is not as polished as Microsoft Office and some formatting may not transfer perfectly between the two.

If you only occasionally need to edit a Word document or create a spreadsheet, the free web versions may be enough. If you work offline frequently, need advanced features, or want desktop apps, a paid subscription is more practical.

Frequently Asked Questions

What happens to my files if I stop paying for Microsoft 365?

Your files remain in OneDrive for 90 days after your subscription ends. During that time, you can download them or reactivate your subscription to regain access. After 90 days, Microsoft may delete the files. Your local copies of documents you edited offline are not affected — only cloud-stored files are at risk.

Can I use Microsoft 365 offline?

Yes. The desktop versions of Word, Excel, PowerPoint, and Outlook work offline. You can create and edit documents without an internet connection. When you reconnect, changes sync to OneDrive automatically. The web versions require an internet connection.

Do I need a Microsoft account to use Microsoft 365?

Yes. You must create or sign in with a Microsoft account to activate the subscription and access your files. A Microsoft account is free to create and is separate from your subscription payment.

Can I share my family plan subscription with someone outside my household?

Microsoft's terms of service state that family plans are for people living in the same household. Sharing with people outside your home violates the terms. If you need to share access with coworkers or people in other locations, a business plan or separate personal subscriptions are the intended options.

Is Microsoft 365 the same as Microsoft Office?

No. Microsoft Office refers to the one-time purchase versions (Office 2021, Office 2019) that you buy once and own permanently. Microsoft 365 is a subscription service. The apps are similar, but 365 includes cloud storage, email, and automatic updates, while purchased Office versions do not.