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

Office 365 (now called Microsoft 365) charges you a recurring fee to use Word, Excel, PowerPoint, Outlook, and other tools. You do not own the software — you rent access to it. When you stop paying, you lose the ability to edit your documents, though you can still view them. The subscription includes cloud storage, regular software updates, and access to mobile versions of the apps.

Microsoft offers different subscription tiers for individuals, families, and businesses. Each tier includes different numbers of users, storage amounts, and features. The price and what you get depend on which plan you choose and whether you pay monthly or annually.

Key Takeaways

  • Microsoft 365 subscriptions renew automatically each month or year, so you need to cancel before the renewal date if you want to stop paying.
  • Individual plans cost less per month than family plans, but family plans let you share one subscription across multiple people and devices.
  • Business subscriptions include email hosting, advanced security, and admin tools that personal subscriptions do not have.
  • You can use Microsoft 365 on Windows, Mac, iPad, iPhone, and Android devices, but the number of devices you can install on depends on your plan.
  • If you cancel, you keep access to your files but cannot edit them until you resubscribe or download them as offline copies.

Personal and family subscription plans

Microsoft 365 Personal is a single-user subscription that covers one person on up to five devices at the same time. It includes 1 terabyte of OneDrive cloud storage and works on Windows, Mac, iPad, iPhone, and Android. You can install the apps on more devices than five, but you can only be signed in and actively using them on five at once.

Microsoft 365 Family is designed for households and covers up to six people. Each person gets their own account, their own 1 terabyte of OneDrive storage, and their own settings and files. Family members do not see each other's documents unless they choose to share them. You manage the subscription and billing from one account, and you can add or remove family members anytime.

Both plans include the full desktop versions of Word, Excel, PowerPoint, and Outlook, plus OneNote, Publisher, and Access. Both renew automatically, so you will be charged again on your renewal date unless you cancel beforehand.

Business subscription plans and what they include

Microsoft 365 Business Basic, Business Standard, and Business Premium are designed for small and medium-sized companies. They cost more per user per month than personal plans, but they include email hosting through Outlook, advanced security features, and tools for managing multiple users and devices across your organization.

Business Basic includes web and mobile versions of Office apps plus email and video conferencing through Teams. Business Standard adds the full desktop versions of Word, Excel, and PowerPoint. Business Premium includes everything in Standard plus advanced threat protection, device management, and data loss prevention.

Business subscriptions are priced per user per month, and you can add or remove users as your team grows or shrinks. Billing is usually monthly, though some resellers offer annual plans. You manage all users and their permissions from a central admin dashboard.

How much storage you get and what happens when you run out

Personal and Family subscriptions include 1 terabyte of OneDrive storage per person. That is enough for roughly 200,000 photos or 500 hours of video, depending on file size. Business subscriptions include 1 terabyte per user as well, though administrators can increase that limit.

If you reach your storage limit, you cannot upload new files to OneDrive or receive new email in Outlook until you delete something or buy more storage. You can purchase additional storage separately — Microsoft sells 100-gigabyte and 200-gigabyte add-ons for a monthly fee. Deleting files from OneDrive moves them to your recycle bin, where they stay for 93 days before permanent deletion.

Canceling your subscription and what happens to your files

You can cancel your Microsoft 365 subscription anytime through your account settings on Microsoft's website. If you cancel before your renewal date, you will not be charged again. You keep access to your files for the rest of the current billing period, but after that period ends, you can no longer edit documents — you can only view them.

To keep your files after cancellation, download them to your computer or save them in a different cloud storage service like Google Drive or Dropbox. Microsoft does not delete your OneDrive files immediately after your subscription ends, but they may delete them after a period of inactivity (usually several months). If you resubscribe before that happens, your files are still there.

If you have an annual subscription and want to cancel early, you may be charged an early termination fee depending on your region and the terms you agreed to. Monthly subscriptions have no early termination fee.

Paying monthly versus paying annually

Monthly subscriptions renew on the same day each month. Annual subscriptions renew once per year. Annual subscriptions usually cost less per month than paying month-to-month, but you pay the full year upfront. If you cancel an annual subscription before it renews, you will not be charged again, but you may not receive a refund for the time remaining.

You can switch from monthly to annual or annual to monthly anytime. If you switch from monthly to annual mid-cycle, Microsoft prorates the charge — you pay only for the months remaining in your current billing period, then your new annual cycle begins.

Using Microsoft 365 on multiple devices

Personal subscriptions let you install Office on up to five devices and be signed in on all of them, but you can only use the apps actively on five devices at the same time. If you sign in on a sixth device, you will be signed out on one of the others. You can choose which device to sign out of, or it happens automatically.

Family subscriptions let each of the six family members install Office on up to five devices each, for a total of 30 device installations across the household. Each person's apps and files are separate unless they choose to share.

Business subscriptions work the same way — each user can install on multiple devices, but the exact number depends on your plan and your organization's policies. Administrators can set rules about which devices are allowed and can remotely remove access from lost or stolen devices.

Frequently Asked Questions

Can I use Microsoft 365 offline, or do I need an internet connection?

You can use Word, Excel, PowerPoint, and Outlook offline after you have installed them and signed in at least once. Your documents sync to OneDrive when you reconnect to the internet. Outlook works offline for email you have already downloaded, but you cannot send or receive new messages until you are back online.

What happens if I do not renew my subscription?

After your subscription expires, you can view your documents but cannot edit them. You can still download them or move them to another service. If you resubscribe within several months, your OneDrive files are still there. Microsoft does not delete files immediately, but they may after a long period of inactivity.

Can I share my subscription with someone else?

Personal subscriptions are for one person only and cannot be shared. Family subscriptions are designed to be shared among up to six household members, each with their own account and files. Business subscriptions are per-user licenses and cannot be shared between people.

Do I need Microsoft 365, or can I use free alternatives?

Microsoft offers free web versions of Word, Excel, and PowerPoint through Office.com if you have a Microsoft account. These have fewer features than the paid subscription versions. Google Docs, Sheets, and Slides are also free alternatives. The choice depends on what features you need and what devices you use.

Can I get a refund if I cancel within a certain time period?

Microsoft's refund policy varies by region and subscription type. Monthly subscriptions typically have a 30-day money-back may provide from the date of purchase. Annual subscriptions may have a shorter refund window. Check Microsoft's refund policy for your region before purchasing.