Microsoft Teams Essentials is a paid tier for small teams who need video meetings and cloud storage without paying for a full Microsoft 365 subscription
Microsoft Teams Essentials costs $4 per user per month when billed monthly, or $40 per user per year when billed annually. It includes unlimited cloud video meetings for up to 100 participants, 1 TB of cloud storage per user, and basic chat and file-sharing features. You do not get Microsoft Office apps like Word or Excel — those come only with Microsoft 365 subscriptions. Teams Essentials is designed for small businesses, nonprofits, and teams that need video conferencing and file storage but do not need the full Office suite.
The free version of Teams lets you hold meetings with up to 100 people, but limits each meeting to 60 minutes. Teams Essentials removes that 60-minute cap. If your team regularly holds meetings longer than an hour, or if you need more than 1 TB of storage per person, you may need a higher-tier subscription instead.
Key Takeaways
- Teams Essentials costs $4 per user per month or $40 per user per year, with no Microsoft Office apps included.
- The main benefit over free Teams is unlimited meeting length — free meetings cap at 60 minutes with 100 participants.
- Each user gets 1 TB of OneDrive cloud storage, which is shared with other Microsoft services if you use them.
- You can add or remove users at any time, so your monthly cost scales with your team size.
What Teams Essentials includes and what it does not
Teams Essentials gives you unlimited video meetings, chat channels, file storage, and screen sharing. You can record meetings and store the recordings in the cloud. Up to 100 people can join a single meeting, and there is no time limit. You can also set up recurring meetings, use a virtual background, and blur your background during calls.
Teams Essentials does not include Microsoft Office desktop apps — Word, Excel, PowerPoint, or Outlook. If you need those, you need Microsoft 365 Business Basic ($6 per user per month) or higher. Teams Essentials also does not include advanced security features like data loss prevention or advanced threat protection, which come with higher-tier plans. If your team needs those features, compare the cost of Teams Essentials plus a separate Office subscription against buying Microsoft 365 directly.
How billing works and when you pay
You set up a Microsoft Teams Essentials subscription through a Microsoft account. You choose whether to pay monthly or annually. Monthly billing charges $4 per user each month. Annual billing charges $40 per user upfront for the year, which works out to about $3.33 per user per month.
You can add or remove users at any time. If you add a user mid-month on a monthly plan, you pay a prorated amount for the remainder of that month, then the full $4 the following month. If you remove a user, you stop paying for that user immediately. Your bill adjusts automatically based on how many active users you have.
You need a valid payment method on file — a credit card or debit card. Microsoft will charge your card on the same day each month (for monthly plans) or on the anniversary of your start date (for annual plans). If a payment fails, Microsoft will retry it a few times before suspending your subscription.
Teams Essentials versus free Teams and Microsoft 365
| Feature | Free Teams | Teams Essentials | Microsoft 365 Business Basic |
|---|---|---|---|
| Meeting length limit | 60 minutes | Unlimited | Unlimited |
| Meeting participants | Up to 100 | Up to 100 | Up to 300 |
| Cloud storage per user | 5 GB | 1 TB | 1 TB |
| Office apps (Word, Excel, etc.) | No | No | Yes, web and desktop |
| Monthly cost per user | Free | $4 | $6 |
Start with free Teams if your meetings are under 60 minutes and you do not need much cloud storage. If you regularly hold longer meetings or need more storage, Teams Essentials is the next step up. If you also need Word, Excel, or Outlook, Microsoft 365 Business Basic includes all of those plus Teams Essentials features, and costs only $2 more per user per month.
Who should buy Teams Essentials
Teams Essentials makes sense for small teams, nonprofits, and contractors who need video meetings longer than 60 minutes but do not need Microsoft Office apps. A consulting firm with five people holding client calls might use it. A nonprofit board that meets monthly for two hours would benefit from removing the 60-minute cap. A freelancer who meets with clients regularly could use it instead of paying for a full Microsoft 365 subscription.
Teams Essentials does not make sense if you already use Microsoft 365 for other reasons — your Teams subscription is already included. It also does not make sense if you need Office apps, because paying $4 for Teams Essentials plus $70 per year for a standalone Office subscription costs more than buying Microsoft 365 Business Basic at $72 per year.
How to set up and manage your subscription
Go to the Microsoft Teams website and select "Get Teams Essentials." You will need a Microsoft account. If you do not have one, you can create one with an email address. Choose whether to pay monthly or annually, enter your payment method, and confirm. You will then be able to download the Teams app or use Teams in your web browser.
To add team members, invite them through the Teams app by their email address. They will receive an invitation and can join your team. Each person you invite counts as one user and adds $4 per month (or $40 per year) to your bill. To remove someone, go to your team settings and remove them from the member list. The charge stops immediately.
You can manage your subscription through your Microsoft account settings. There you can change your payment method, switch between monthly and annual billing, or cancel at any time. If you cancel, you lose access to Teams Essentials at the end of your current billing period, but your files remain in cloud storage for a limited time.
Frequently Asked Questions
Can I try Teams Essentials before paying?
No, there is no trial period. However, free Teams has most of the same features — the main difference is the 60-minute meeting limit. You can test free Teams first to see if the longer meeting time is worth $4 per user per month.
What happens to my files if I cancel?
Your files stay in cloud storage for 90 days after cancellation. During that time, you can download them or reactivate your subscription to keep them. After 90 days, Microsoft deletes the files permanently.
Can I use Teams Essentials for a business meeting with a client outside my organization?
Yes. You can invite anyone to a Teams meeting by sending them a link, even if they do not have a Teams account. They can join through a web browser without signing in.
Is Teams Essentials the same as Microsoft Teams Free?
No. Free Teams has a 60-minute meeting limit and 5 GB of storage per user. Teams Essentials removes the meeting time limit, gives you 1 TB of storage per user, and costs $4 per user per month.
Do I need to buy a separate license for each person on my team?
Yes. Each person who uses Teams Essentials needs their own license. You pay $4 per user per month. You can add or remove users at any time, and your bill adjusts accordingly.