Microsoft 365 is a monthly or yearly subscription to Microsoft's productivity software, not a one-time purchase

Microsoft 365 (formerly Office 365) bundles email, word processing, spreadsheets, presentations, and cloud storage into a single subscription you renew regularly. You do not own the software — you rent access to it. When your subscription ends, you lose access to the files you created unless you download them first. The cost, what software comes with it, and how many devices you can use it on all depend on which plan you choose.

Microsoft offers several versions aimed at different users: personal plans for individuals, family plans that cover multiple people, and business plans for companies. Each tier includes different combinations of apps and storage. Some plans let you install the software on your computer; others work only through a web browser. Understanding which plan fits your actual needs — and what happens if you stop paying — matters before you commit.

Key Takeaways

  • Microsoft 365 subscriptions renew automatically each month or year, and you lose access to the software when your subscription ends, though you can download your files beforehand.
  • Personal plans cost less than family plans but cover only one person; family plans cost more but let you add up to six people, each with their own account.
  • Some plans include desktop versions of Word, Excel, and PowerPoint that you install on your computer; others offer only web-based versions you access through a browser.
  • All plans include OneDrive cloud storage, but the amount varies — personal plans typically include 1 terabyte, while business plans vary by tier.
  • You can cancel your subscription at any time, but you will not receive a refund for the unused portion of the current billing period in most cases.

Personal and family plans: who they cover and what they cost

Microsoft 365 Personal covers one person on up to five devices. It includes the desktop versions of Word, Excel, PowerPoint, Outlook, and OneNote, plus 1 terabyte of OneDrive storage and 60 minutes of Skype calling per month. You can use it on a Windows computer, Mac, tablet, or phone. The subscription renews monthly or yearly depending on which option you choose at purchase.

Microsoft 365 Family covers up to six people, each with a separate Microsoft account. Each person gets their own 1 terabyte of OneDrive storage, so the household shares 6 terabytes total. Each person can install the desktop apps on up to five devices. The subscription costs more than Personal but spreads across multiple users, which makes it cheaper per person if your household actually uses it. One person manages the subscription and can add or remove family members at any time.

Both plans include access to Microsoft 365 online apps (Word, Excel, PowerPoint, Outlook, OneNote) through any web browser, even if you do not install the desktop versions. This means you can work on documents from any computer, phone, or tablet with internet access, whether or not you have paid for the subscription on that device.

Business plans: what separates them from personal subscriptions

Microsoft offers separate subscription tiers for small businesses and enterprises. Microsoft 365 Business Basic includes web and mobile versions of Office apps, email hosting through Outlook, 1 terabyte of OneDrive storage per user, and Teams (video conferencing and chat). It does not include desktop versions of Word, Excel, or PowerPoint. Microsoft 365 Business Standard adds the desktop versions of those apps. Microsoft 365 Business Premium adds security and device management features aimed at protecting company data.

Business plans are priced per user per month, not as a flat household fee. A company with ten employees pays for ten subscriptions. Each employee gets their own account, email address, and storage. The business owner or administrator controls who has access, what data they can see, and what devices they can use the software on. These plans also include technical support from Microsoft, which personal plans do not.

What happens to your files when your subscription ends

When you stop paying for Microsoft 365, you lose the ability to edit documents in Word, Excel, PowerPoint, and other apps. You can still view your files in OneDrive for 30 days after your subscription ends, but you cannot make changes. After 30 days, your OneDrive account and all files in it are deleted unless you download them first.

If you have documents stored only in OneDrive and nowhere else, download them to your computer before your subscription expires. You can download files one at a time or download your entire OneDrive as a single compressed folder. Once downloaded, you can open and edit them with free alternatives like Google Docs or LibreOffice, though the formatting may not match exactly.

Email in Outlook is handled differently. If your subscription includes Outlook email (which personal plans do not), your email account closes when the subscription ends. You cannot recover old emails after the account closes, so export them to a file or forward important messages to a personal email account before your subscription ends.

Installing the software on your devices

Plans that include desktop apps let you install Word, Excel, PowerPoint, and Outlook on your computer. The number of devices you can install on depends on your plan: Personal covers up to five devices, and Family covers up to five devices per person. You can install on a mix of Windows computers and Macs.

Installation requires you to sign in with your Microsoft account each time you open the software. If your subscription lapses, the software stops working — you cannot use it in offline mode indefinitely. You can still view documents you created, but you cannot edit them. Reinstalling the software after your subscription renews will restore full functionality.

If you prefer not to install software on your computer, all plans include access to the web versions of Word, Excel, PowerPoint, and other apps through Microsoft 365 online. These work in any web browser and do not require installation. They have fewer features than the desktop versions but are sufficient for basic document creation and editing.

OneDrive storage and how much you actually get

Every Microsoft 365 subscription includes OneDrive cloud storage. Personal and Family plans include 1 terabyte per person. Business plans vary: Business Basic and Business Standard include 1 terabyte per user, while Business Premium includes 1 terabyte per user as well. One terabyte equals 1,000 gigabytes, which is enough for roughly 250,000 photos or 500 hours of video, depending on file size.

OneDrive syncs files between your devices automatically. If you save a document on your computer, it appears on your phone and tablet without you having to manually transfer it. You can also share files and folders with other people, giving them permission to view or edit. Sharing does not use their storage — it only uses yours.

If you run out of storage, you can purchase additional OneDrive space separately, or you can delete files you no longer need. Microsoft will warn you when you are approaching your limit.

Automatic renewal and how to cancel

Microsoft 365 subscriptions renew automatically on the date your payment is due. If you pay monthly, it renews every month. If you pay yearly, it renews every year. Microsoft will charge your payment method (credit card, debit card, or PayPal account) automatically unless you cancel before the renewal date.

To cancel, sign in to your Microsoft account, go to your subscription settings, and select the option to cancel the subscription. You can do this at any time, even on the last day of your billing period. Cancellation takes effect immediately, but you will not receive a refund for the unused portion of your current billing period. You can continue using the software until the end of that period, then access ends.

If you cancel and later decide you want the subscription back, you can resubscribe at any time. Your OneDrive files remain in your account for 30 days after cancellation, so you can recover them if you resubscribe within that window.

Frequently Asked Questions

Can I use Microsoft 365 on a Mac?

Yes. Personal and Family plans include desktop versions of Word, Excel, PowerPoint, and Outlook for Mac. You can install on up to five devices per person, mixing Windows computers and Macs however you want. The Mac versions have the same features as the Windows versions.

What is the difference between Microsoft 365 and Microsoft Office?

Microsoft Office is a one-time purchase — you pay once and own the software forever. Microsoft 365 is a subscription you renew regularly. Office includes Word, Excel, and PowerPoint but not email or cloud storage. Microsoft 365 includes those plus OneDrive, Outlook, and other apps. Office is cheaper upfront but does not receive updates; Microsoft 365 receives new features regularly.

Do I need Microsoft 365 to open files someone sent me?

No. You can view and edit Word, Excel, and PowerPoint files using free alternatives like Google Docs, LibreOffice, or the web versions of Microsoft 365 apps (which you can access without a subscription). The formatting may not match exactly, but you can open and work with the files.

Can I share my Microsoft 365 Family subscription with someone who does not live with me?

Technically yes, but Microsoft's terms of service state that Family subscriptions are for people living in the same household. Microsoft does not actively police this, but they reserve the right to disable accounts that violate the terms. If you want to share with someone outside your household, a Personal subscription for each person is the safer choice.

What happens if I do not renew my subscription?

You lose access to the desktop software immediately. You can view files in OneDrive for 30 days, then they are deleted. You can download your files before that deadline. Email accounts close and cannot be recovered. You can resubscribe at any time to regain access to the software.