Exchange Online Plan 1 vs Plan 2: Which Mailboxes Earn the $4-$8 Upgrade

Plan 2 is an upgrade you buy one person at a time, not for the whole office. So don’t ask which plan your company needs. Ask which mailboxes need it, and know that some of your mailboxes may need no license at all.

In Exchange Online Plan 1 vs Plan 2, both plans run the same email service. CyberDuo’s comparison describes Plan 2 as Plan 1 with four additions: a larger mailbox, a larger archive, data loss prevention (DLP) and Cloud Voicemail. It also costs twice as much. The price goes from $4.00 to $8.00 per user per month on an annual commitment, according to CyberDuo’s listing of Microsoft’s US prices as of 19 March 2026.

That $4 gap is what you pay to move a standalone Plan 1 user. On a Microsoft 365 Business plan, Hungerford describes Plan 2 as an add-on at the full $8 per user per month. Business Basic, Standard and Premium each already include a 50 GB main mailbox, the same as Plan 1, per Hungerford.

• Pick Plan 1 if the person mainly needs hosted email and fits within 50 GB.
• Pick Plan 2 for one person if their mailbox keeps getting close to full even after archiving policies are in place, or their mail needs Litigation Hold, DLP or Cloud Voicemail.
• Skip Plan 2 if the person is on Business Premium and only the archive is full. Hungerford says Premium already includes an archive of up to 1.5 TB.

Plan 1 and Plan 2 run the same email service, and 50 GB is often enough

Plan 2 doesn’t swap anything out of Plan 1. It adds to it (CyberDuo). Both are email-only plans. Hungerford notes that standalone Plan 2 doesn’t include Word, Excel or PowerPoint, and Plan 1 is the smaller of the two, so it doesn’t either.

According to CyberDuo, Plan 1’s mailbox is often enough for a small business that mostly needs hosted email.

Plan 2 adds a 100 GB mailbox, up to 1.5 TB of archive, DLP and Litigation Hold

The main mailbox doubles from 50 GB to 100 GB. Hungerford adds a caveat: the extra room is “just putting off the pain for a little longer.” Hungerford lists the archive as 100 GB to 1.5 TB. It reaches 1.5 TB only once an admin turns on auto-expanding archiving, per CyberDuo, ExchangeMVP and Hungerford. CyberDuo lists In-Place Hold, Litigation Hold and DLP as Plan 2 only, and ExchangeMVP agrees on Litigation Hold and DLP.

Plan	Price per user, annual commitment	Main mailbox	Archive	DLP, Litigation Hold, Cloud Voicemail
Exchange Online Plan 1	$4.00/mo = $48/yr	50 GB	50 GB	No
Exchange Online Plan 2	$8.00/mo = $96/yr	100 GB	100 GB-1.5 TB; 1.5 TB needs auto-expanding archiving on	Yes
Business Basic / Standard	—	50 GB	50 GB	—
Business Premium	—	50 GB	100 GB-1.5 TB	—

Prices come from CyberDuo (Microsoft US prices as of 19 March 2026). Sizes and features come from CyberDuo, ExchangeMVP and Hungerford; the archive ranges are Hungerford’s. A dash means those sources don’t list the figure.

What the upgrade costs for one standalone Plan 1 user: $8.00 − $4.00 = $4.00 per user per month. Times 12, that is $48 per user per year, so moving 5 people costs $240 a year. For a Business plan user, Hungerford describes Plan 2 as an $8 add-on, so the cost is $8.00 × 12 = $96 per user per year on top of the Business plan.

Shared, room and resource mailboxes under 50 GB need no license

Microsoft’s Exchange Online service description says conference rooms and shared mailboxes don’t need a user subscription. Nobody signs in to them directly. Licensed users open them through delegation, which means being given access to them. So an info@ inbox or a meeting-room calendar costs nothing extra.

The exception is size. Microsoft’s subscriptions and licenses page says resource, room and shared mailboxes need a license once they go over their 50 GB storage limit. Check their size before you assume they’re free.

F1 users can’t use their mailbox, so F1 alone won’t cover email

Microsoft 365 F1 is a license for frontline workers. Microsoft’s plan options page says F1 may have the Exchange Online K1 service plan turned on so Teams works fully, but F1 users have no right to use the mailbox it creates. An F1 worker who needs email needs a license that includes a mailbox.

Try archiving policies before paying for Plan 2

Hungerford sets the order. If a main mailbox keeps getting close to full, first make better use of company-level archiving policies. Move to Plan 2 only if that doesn’t solve it.

Don’t count on raising the limit yourself. Microsoft’s Exchange Online limits page says customers can’t modify most of its limits. That leaves archiving, cleaning out old mail, or a bigger plan.

Checklist: six steps to decide who actually needs Plan 2

1. List your shared, room and resource mailboxes. Microsoft’s service description says they need no user subscription. Don’t buy Plan 1 or Plan 2 for them.
2. Check each one’s size. Any that is over 50 GB needs a license, per the subscriptions and licenses page.
3. Set F1 users aside. F1 gives no right to use the K1 mailbox (plan options). If one of them needs email, they need a license with a mailbox they can use, and then steps 4 to 6 apply to them too.
4. Find licensed users who are close to 50 GB. That is the Plan 1 limit (CyberDuo) and the main mailbox size on Business plans (Hungerford). Anyone well under it stays where they are.
5. Apply company-level archiving policies to those users first (Hungerford). For Business Premium users, use their existing archive of up to 1.5 TB before anything else.
6. Move only the users who still need it. That means someone whose mailbox is still close to full after step 5, or who needs Litigation Hold, DLP or Cloud Voicemail. Microsoft says “you can assign licenses to different people for each subscription”. Each standalone Plan 1 user you move adds $48 a year. On a Business plan, Hungerford’s $8 add-on figure means $96 a year.

Where Plan 2 falls short: double the price, and more room only buys time

Plan 2 costs twice as much as Plan 1 (CyberDuo). The extra room also doesn’t stop a mailbox from filling up: Hungerford calls it “just putting off the pain for a little longer.” The checklist handles both problems: archive first, as Hungerford advises, then give Plan 2 to named people, not the whole office. Anyone who needs Word, Excel or PowerPoint belongs on a Business plan, with Plan 2 added only if steps 4 to 6 point to them.

But Plan 2 is the only plan in this comparison with a 100 GB main mailbox, and the only one these sources list with Litigation Hold, DLP and Cloud Voicemail. Buy it for the person who needs one of those, or whose mailbox still fills up after archiving policies are in place. Keep everyone else on their current plan.

How we evaluated

We compared the plans on price per user per month and per year, main mailbox and archive size, compliance and voicemail features, and which mailboxes need no license. The licensing rules come from four Microsoft Learn pages: the Exchange Online service description, the limits page, the plan options page and the subscriptions and licenses page. Plan sizes, prices and the advice on what to try first come from CyberDuo, ExchangeMVP and Hungerford. More plan comparisons are in our Microsoft 365 licensing guides.

FAQ

Do shared mailboxes need an Exchange Online license? Not while they’re under 50 GB. Microsoft’s service description says shared mailboxes and conference rooms need no user subscription. Once one goes over 50 GB, the subscriptions and licenses page says it needs a license.

Can one office mix Plan 1 and Plan 2? Yes. Microsoft says that if you have more than one subscription, you can assign licenses to different people for each subscription.

Does Plan 2 include Word and Excel? No. Hungerford describes standalone Plan 2 as email only.

What does moving from Plan 1 to Plan 2 cost? For a standalone Plan 1 user it costs $4.00 more per user per month, or $48 per user per year, at the prices CyberDuo lists. On a Business plan, Hungerford describes Plan 2 as an $8-a-month add-on, which is $96 a year.