Microsoft 365 email hosting for a small business: which plan, what it costs, and what to check

Short answer: Microsoft 365 email hosting for a small business costs from £3.10 to £16.90 a person a month, before VAT, depending on which plan you pick. For most offices the choice comes down to two. Business Basic at £5.40 suits a team that works in the browser. Business Standard at £10.80 suits people who need the desktop Word, Excel and Outlook. Business Premium at £16.90 adds the security and device management that Basic and Standard leave out. Every one of them gives you proper business email on your own domain.

The plan names change every couple of years and the comparison pages are written to sell you the next tier up. This is the plain version: what Microsoft 365 email hosting actually gets you, what each plan costs, and the few things worth checking before you sign up for a year.

Not sure which plan you’re paying for now? Ring 0151 452 3060. Tell me what your team actually uses and I’ll tell you which Microsoft 365 plan fits, and whether you’re paying for more than you need.

What Microsoft 365 email hosting gets a small business

Email hosting is the service that keeps your mailboxes and delivers your mail. With Microsoft 365 email hosting, that’s Exchange Online, the same email system large organisations run on, sold per person to businesses from one user up to 300.

Every Microsoft 365 business plan includes:

• Business email on your own domain, so you’re [email protected], not a Gmail or Hotmail address.
• A 50 GB or 100 GB mailbox per person, plus archive space, depending on the plan.
• Shared calendars, contacts and shared mailboxes, so accounts@ and info@ can be read by whoever needs them without sharing a password.
• Spam and malware filtering on everything coming in.
• Outlook on the web and on phones, with mail, calendar and contacts in sync everywhere.

That’s the real difference from “private email hosting”, the mailbox that came with the website or the domain. Those are usually IMAP accounts: mail only, small mailboxes, no shared calendars, and nobody watching the sign-ins. They’re fine for a sole trader. They start to creak the moment two people need to see the same diary.

Microsoft 365 email hosting plans for small business, and what each costs

These are Microsoft’s own UK prices as listed on 15 October 2026. They’re per person a month, before VAT, on a yearly subscription.

Exchange Online (Plan 1), £3.10. Email only. A 50 GB mailbox, calendars and contacts, and no Office apps or Teams. It suits a mailbox that only ever needs to send and receive, such as a warehouse login or a part-timer who does everything in a browser.

Microsoft 365 Business Basic, £5.40. Email with a 100 GB mailbox, plus Teams, 1 TB of OneDrive storage and the web and mobile versions of Word, Excel and PowerPoint. If your team mostly works in a browser, this is the sweet spot, because Teams and shared files come with it.

Microsoft 365 Business Standard, £10.80. Everything in Basic, plus the desktop apps on up to five PCs or Macs per person. If your staff live in desktop Excel or Outlook, this is the plan.

Microsoft 365 Business Premium, £16.90. Everything in Standard, plus the security tools: device management, stronger protection against phishing and malware, and a much bigger email archive. It’s the plan we recommend for any business holding client data, because it’s the one that lets you control the laptops as well as the mailboxes.

There’s also Exchange Online (Plan 2) at £6.20 for email only with a 1.5 TB archive, and “with Copilot” versions of Standard and Premium. Most small businesses don’t need either to start with.

Email only, or the full Microsoft 365?

If all anyone wants is better email, Business Basic usually beats email-only hosting. It’s £2.30 more than Exchange Online Plan 1, and for that you get Teams, a terabyte of storage each and shared files in SharePoint. That’s often enough to retire a file server or a pile of Dropbox accounts.

Mix and match is allowed. You don’t have to put everybody on the same plan. A typical small office might have the partners and the accounts team on Business Standard or Premium and everyone else on Basic. Microsoft 365 is billed per person, so the plan follows the job, not the business.

Monthly or yearly: the billing detail that catches small businesses out

The prices above are for a yearly subscription. Pay monthly with no commitment and Business Standard goes from £10.80 to £12.96 a person, and Business Premium from £16.90 to £20.28. That’s 20% more for the flexibility.

The catch with yearly is that it’s a commitment. You can add people at any time, but you normally can’t drop licences until the renewal date. So if you’ve got seasonal staff or you’re about to shrink, a mix works: yearly for the core team, monthly for the people who come and go. Ask whoever sells you Microsoft 365 which you’re on. A surprising number of businesses don’t know.

Moving your email over is a separate job. If you’re still on an old Exchange server, Google or website email, the email migration guide covers what comes across and how the switch is done without losing a day.

Managed email hosting: what you get on top of the licence

A Microsoft 365 licence gets you the mailbox. It doesn’t get you somebody setting it up properly or keeping an eye on it. Out of the box, nobody has checked that multi-factor sign-in is really on for every mailbox. Your domain’s email records aren’t set up for you. And nothing is backed up beyond a short recycle bin.

That’s the gap managed email hosting fills. Our small business IT support is £55 a person a month and covers the email side as standard. That means email filtering on top of Microsoft’s own, multi-factor sign-in on every account and phishing practice for your team. It also means monitoring for passwords that turn up in breaches, and tested backups of every mailbox. It also covers the laptops, updates and everyday Microsoft 365 admin. We check your domain records when you start. You buy the Microsoft licences direct from Microsoft, at Microsoft’s price, so you can see exactly what you’re paying for the email hosting and what you’re paying for the people looking after it.

Five things to check before you choose Microsoft 365 email hosting

• Who owns the account? The Microsoft 365 account should be in your business’s name, with you holding a global admin login. If a provider owns it, leaving them gets complicated.
• Is multi-factor sign-in on for everyone? Only 40% of UK businesses use it on email (DSIT 2025), and 85% of attacks start with phishing (DSIT 2025). It costs nothing to switch on.
• Who’s backing up the mailboxes? Microsoft keeps deleted items for 14 days by default, or up to 30. That’s a recycle bin, not a backup. Something deleted three months ago is gone unless somebody else is keeping a copy.
• Are SPF, DKIM and DMARC set up for your domain? These records stop other people sending email that looks like it came from you. They’re part of the setup, not an extra.
• Are you on the right plan for each person? Paying Business Premium for someone who only reads email is £11.50 a month wasted. Paying Basic for someone who handles client data is a different kind of saving.

Microsoft 365 email hosting: common questions

Is there free Microsoft email hosting for a business?
Not really. Microsoft’s free Outlook.com accounts are personal accounts. Business email on your own domain comes with a paid Microsoft 365 business plan, and the cheapest is Exchange Online (Plan 1) at £3.10 a person a month before VAT. Microsoft offers a one-month trial on most plans.

Is Office 365 email hosting the same thing?
Yes. Office 365 was renamed Microsoft 365 for business plans. It’s the same Exchange Online service under a newer name.

Can I keep my domain and email address?
Yes. You add your domain to Microsoft 365 and point its email records at Microsoft. Your addresses stay the same.

How many people can be on a Microsoft 365 business plan?
Up to 300 per plan. Above that, Microsoft’s enterprise plans take over.

Can I buy Microsoft 365 email hosting through you?
You buy the licences direct from Microsoft, or keep the account you’ve already got, and we look after it. That way the licences stay in your name at Microsoft’s price, separate from our £55.

Get your small business email hosting sorted properly

Microsoft 365 email hosting is the right answer for most small businesses. The plan matters less than whether it’s set up properly: the right person on the right plan, multi-factor on everyone, the domain records in place and a backup that isn’t just the recycle bin.

Ring 0151 452 3060 and tell me how many people you’ve got and what they use. You’ll get a straight answer on which Microsoft 365 plan fits each of them, or see what’s in small business IT support at £55 a person a month.