Microsoft 365 suites with and without Teams: licensing options explained

Microsoft 365 and Office 365 suites are sold in two versions: with Teams, and without Teams at a lower price. Since November 1, 2025, Enterprise suites with Teams are available again to new customers worldwide, so you can choose either a suite that includes Teams or a no-Teams suite plus a standalone Teams Enterprise licence (Teams EEA in Europe). The no-Teams option only saves money for users who don't need Teams at all, because Teams Enterprise costs at least as much as the price difference.

Who this is for and what you will have

This guide is for Microsoft 365 administrators, licensing owners and IT leads who are renewing, adding seats, or inheriting a tenant with a mix of with-Teams and no-Teams SKUs. At the end you will have:

• The timeline of Microsoft's Teams licensing changes and what applies today.
• The July 2026 list prices for each suite in both versions, with the price difference.
• A decision table for when each option makes sense.
• The valid licence combinations for Teams Phone.
• PowerShell to find which users actually have Teams and how to remove or add it.

How the Teams licensing rules changed

The current options are the result of four changes, all documented by Microsoft:

The November 2025 change comes from Microsoft's legally binding commitments to the European Commission. Microsoft states that the minimum price deltas between suites with and without Teams are held constant in US dollars for the seven-year enforcement period. The reversal of end of sale and the price changes apply worldwide, while some other elements of the commitments are enforceable only for customers with a billing address in the EEA.

Some Learn pages still show the April 2024 wording, which says new Enterprise customers must buy two SKUs. Microsoft's Teams licensing FAQ, which describes the November 2025 reversal, is the current position.

Prices with and without Teams

Microsoft's US list prices per user per month after July 1, 2026:

Business Basic's rounded list prices give $1.60, while Microsoft's FAQ states the minimum delta as EUR 1.50 ($1.61). The standalone Teams licences carry minimum prices set by the same commitments: Teams Enterprise and Teams EEA at EUR 8.00 ($8.55), and Teams Essentials at EUR 3.00 ($3.21). Microsoft states that prices vary by country and currency and that existing customers move to new prices at their next renewal after the effective date. Consumer, Academic, US Government and Nonprofit-specific SKUs are not affected by the Teams changes, but government entities that buy from the commercial price list are.

For what the suites themselves include, see the Business Premium vs E3 vs E5 comparison.

Your licensing options

Because the Teams Enterprise minimum price equals the Enterprise delta, a no-Teams suite plus Teams Enterprise costs at least as much as the suite with Teams. The saving only exists for users who genuinely don't use Teams.

Rules for existing customers

• Customers who subscribed to suites with Teams before the April 2024 change kept the right to use, renew, upgrade and adjust those subscriptions.
• Existing customers on no-Teams suites became subject to the new pricing at their next renewal after November 1, 2025. Pricing for suites with Teams was not affected by that change.
• Customers on Microsoft 365 E3 or E5 "Original" SKUs must move to the equivalent "Unified" SKU at their next renewal.

EEA and Switzerland

Separate no-Teams suites remain for the EEA and Switzerland, with Teams EEA as the standalone. EEA customers on multi-year contracts, regardless of channel, can switch to no-Teams suites at their anniversary for five years and keep their discounts. From October 1, 2025, Microsoft Teams trials in the EEA are limited to 31 days.

Teams Phone and Audio Conferencing

Teams Phone needs both the Microsoft Teams application and the Microsoft 365 Phone System application on the user. Microsoft documents these example combinations:

With any Microsoft 365 E5 licence, you don't need a separate Teams Phone Standard licence. Teams Phone Standard itself has prerequisites, including Business Basic, Standard or Premium, Microsoft 365 F1/F3/E3, Teams Enterprise, Teams EEA, Teams Essentials (AAD Identity) and Office 365 F3/E1/E3. For calls to and from phone numbers you still need a PSTN connectivity option: a Microsoft Calling Plan, Operator Connect, Teams Phone Mobile or Direct Routing. Shared Calling, which lets users make and receive PSTN calls through the number of an auto attendant resource account, is another option and also requires a Teams Phone licence.

Audio Conferencing, which lets people dial in to meetings from a phone, is included in E5. E1 and E3 customers buy it separately.

Prerequisites

• An admin account with at least the User Administrator role, or License Administrator for licence changes. Microsoft's Teams documentation states that managing Teams licences requires at least User Management Administrator privileges.
• Microsoft Graph PowerShell with User.Read.All and Organization.Read.All for the reports below.
• A list of which users need Teams, Teams Phone and Audio Conferencing.

Step 1: Inventory your SKUs and Teams plans

List every subscription and whether it contains a Teams service plan. Microsoft documents TEAMS1 as the service plan identifier for Microsoft Teams (with TEAMS_GOV and TEAMS_DOD in government clouds):

Connect-MgGraph -Scopes 'Organization.Read.All','User.Read.All'
 
Get-MgSubscribedSku -All | ForEach-Object {
    [pscustomobject]@{
        Sku       = $_.SkuPartNumber
        Enabled   = $_.PrepaidUnits.Enabled
        Consumed  = $_.ConsumedUnits
        TeamsPlan = ($_.ServicePlans | Where-Object ServicePlanName -like 'TEAMS*').ServicePlanName -join ', '
    }
} | Format-Table -AutoSize

SKUs with an empty TeamsPlan column don't give users Teams. That is what a no-Teams suite looks like in your tenant.

Step 2: Find users who have Teams and users who don't

Check each licensed user's service plans and their provisioning status. A status of Disabled means the plan is in the licence but switched off for that user:

$users = Get-MgUser -All -Property Id, UserPrincipalName, AssignedLicenses |
    Where-Object { $_.AssignedLicenses }
 
$report = foreach ($u in $users) {
    $teams = Get-MgUserLicenseDetail -UserId $u.Id |
        ForEach-Object { $_.ServicePlans } |
        Where-Object { $_.ServicePlanName -like 'TEAMS*' }
 
    [pscustomobject]@{
        User        = $u.UserPrincipalName
        TeamsPlans  = ($teams.ServicePlanName | Sort-Object -Unique) -join ', '
        TeamsStatus = ($teams.ProvisioningStatus | Sort-Object -Unique) -join ', '
    }
}
 
$report | Export-Csv 'C:\Temp\TeamsLicensing.csv' -NoTypeInformation

Users with an empty TeamsPlans value hold only no-Teams licences. Users with Success have Teams; users with only Disabled have a Teams-capable licence with Teams turned off.

Step 3: Add or remove Teams

To give Teams to users on a no-Teams suite, assign a Teams Enterprise (or Teams EEA) licence. For more than a handful of users, assign it to a group; Microsoft's Teams documentation recommends PowerShell or group-based licensing for hundreds or thousands of users. The guide to group-based licensing shows the setup and the error fixes.

To turn Teams off for users on a with-Teams suite, disable the TEAMS1 service plan in their licence, either per user in the admin center or in the group licence with DisabledPlans. Microsoft notes that it takes about 24 hours for disabling a Teams SKU to take effect, after which the user no longer sees Teams in the app launcher or home page.

Turning Teams off doesn't reduce what you pay. To save money, move those users to the no-Teams version of the suite at renewal.

Verification

• Re-run the Step 2 report after changes and after 24 hours for removals.
• In the Microsoft 365 admin center, open Billing > Licenses, select the Teams Enterprise product and confirm the assigned count matches the users who need it.
• For Teams Phone users, confirm each has both a Teams plan and the Phone System application, and that PSTN connectivity is in place before you assign phone numbers.

Troubleshooting

A user on Microsoft 365 E3 (no Teams) can't sign in to Teams. The licence has no Teams service plan. Assign Teams Enterprise, or Teams EEA for EEA tenants.

A user with E5 (no Teams) can't be enabled for Teams Phone. E5 (no Teams) provides Phone System but not the Teams application. Add Teams Enterprise.

Teams Phone Standard can't be assigned. The tenant or user lacks a prerequisite licence from the list above.

Teams still appears after you removed it. Allow about 24 hours. If the user has Teams from a second licence or a second group, removing it from one source isn't enough; check the TeamsPlans column across all licences.

A partner quote only offers no-Teams Enterprise suites. That reflects the April 2024 rules. Since November 1, 2025, suites with Teams are again available in all channels; ask for them explicitly.

Checklist

• Users split into three populations: need Teams, need Teams Phone, don't need Teams.
• Price compared per population: suite with Teams versus no-Teams suite plus Teams Enterprise.
• EEA tenants use EEA SKUs and Teams EEA.
• Microsoft 365 E3/E5 "Original" SKUs scheduled for transition to "Unified" at renewal.
• Teams Phone users hold Teams plus Phone System, plus a PSTN option.
• Teams licence report exported and reviewed after every licensing change.

References

• Teams Suite Packaging FAQs
• Realigning global licensing for Microsoft 365
• Microsoft 365 Pricing and Packaging Updates
• Microsoft 365 Packaging and Pricing Updates Public FAQ
• Manage user access to Microsoft Teams
• Microsoft Teams add-on licenses
• Teams Phone licensing
• Get-MgUserLicenseDetail
• servicePlanInfo resource type