How to model a business email bill

Business email pricing moves: list prices change, tiers get renamed, and last year's cheapest plan can move a feature you rely on into the tier above. The list prices below are published list prices; verify each one on the vendor's own pricing page before you commit.

This page covers the shape of business email pricing. It shows how the bill is assembled, which parts grow, and how to work out your own number from your own headcount.

Use the model below to organize an offer's cost components. Fill it with current vendor prices and terms to calculate an estimate for your own team.

What to take away

How the bill is assembled

Nearly every offer in this category is built from the same few components. Identify them and you can compare things that look nothing alike.

Per seat, per month, usually with an annual option. The unit is a mailbox with a human attached. This is the headline number and the one everyone compares. It is also the one least likely to determine what you actually pay.

The tiers most readers compare are Google Workspace Business Starter, Microsoft 365 Business Basic and Zoho Mail Lite. Typical published list prices for those entry tiers, on an annual commitment, are:

Monthly billing usually costs more. Typical published monthly rates are about US$7.20 for Google Workspace Business Starter, about US$7.20 for Microsoft 365 Business Basic, and about US$1.25 for Zoho Mail Lite. Check those against the source before you use them: Google Workspace, Microsoft 365 and Zoho Mail all publish their current list prices on their own pricing pages.

A commitment discount. Paying yearly is cheaper than paying monthly. The trade is flexibility: an annual commitment normally fixes your seat count for the term, so you pay for people you no longer employ until renewal. If your headcount moves a lot, the monthly premium is buying you something real.

A floor. Some offers have a minimum number of seats, or a minimum spend, or a price that only applies above a certain size. Small teams pay list price; large ones do not. Ask in writing whether a minimum seat count or a minimum monthly spend applies to your tier, and at what headcount a volume rate starts.

Storage. Sometimes per seat, sometimes pooled across the organization. The difference matters enormously and is discussed below.

Add-ons. Archiving, extended retention, advanced filtering, compliance and legal-hold features, additional security tooling. These are priced separately often enough that you should assume they are until you have confirmed otherwise.

Everything that is not on the price page at all. Migration, one-off setup, training, and the administrative time to run it. Real money, invisible in any comparison table.

Per seat versus flat: which shape fits you

Per-seat pricing is the default in this category, and it has a simple property: your bill is a straight line through your headcount. Predictable, and it punishes exactly one thing, accounts for entities that are not people.

That is where the shape starts to matter. Every organization needs addresses no individual reads: general inquiries, a role address for invoices, a department, a system that sends notifications.

Whether those cost a full seat is one of the most consequential pricing questions in the category, and it is rarely on the price page.

Ask specifically:

For a small business those four answers can change the bill by a large fraction, entirely independently of the advertised per-seat rate. A team of ten people might genuinely need considerably more than ten addresses, and whether that costs ten seats or thirty is decided by these answers.

Flat-rate offers exist, usually bundled with hosting or a domain. They tend to be cheap and to withhold the administrative and security features that make email manageable at any scale. That can be exactly right for a team of three and a serious problem for a team of forty.

What the entry tier usually withholds

The cheapest paid tier in this category is not a smaller version of the expensive one. It is the same mail service with the administrative apparatus removed. The pattern is consistent enough to plan around:

None of that is unreasonable: those features cost the vendor money to build and run. What matters for your budget is that the requirement forcing you upward is usually a governance requirement, not a mail one.

Teams often need the higher tier for one item on that list, then pay the full difference across every seat to get it.

So work out which of those you actually need before you compare headline rates. Comparing entry tiers is only meaningful if the entry tier is a tier you could genuinely use.

Storage and retention are the real cost driver

Mail volume only grows. Nobody deletes anything, attachments get bigger, and the cost of storage is the cost that compounds with time rather than with headcount.

Included storage is typically 5 GB to 50 GB per seat on the entry tier. The mid tier usually pools 1 TB to 2 TB per user, and the top tier goes to 5 TB. Check the current figure, because pooled and per-seat quotas behave differently when headcount changes. Then ask the two questions the plan pages rarely answer: what an extra gigabyte costs once a mailbox passes its ceiling, and whether the account is billed automatically for the overage or simply stops accepting new mail.

Set the retention period from your obligations, not the tier on offer. The default window for recovering a deleted item is typically weeks, not months, and anything longer is a paid extension.

Retention attaches to a class of content, not a container; that is the logic behind published records control schedules. Sector rules work the same way: broker-dealers answer to SEC Rule 17a-4 and FINRA Rule 4511, health organizations to HIPAA, and public companies to Sarbanes-Oxley. Knowing which of your mail carries an obligation turns an unbounded storage bill into a decision.

Model this over the term of the contract rather than at signing. A price that is fine at today's volume and painful at three years of accumulation is a common outcome.

What happens to the bill as you grow

Growth does not scale the bill smoothly. It moves in steps:

The useful discipline is to price two scenarios: your team as it is now, and your team at whatever size you would consider a good outcome in three years. If the second number is unacceptable, you have learned something now rather than at renewal.

Build your own model

Take any offer and fill this in with figures you obtain yourself, from the vendor's current published pricing.

Then run the whole thing twice: at today's size and at your three-year size. The gap between those two numbers is the thing worth negotiating over.

A worked example makes the shape concrete. The figures are illustrative, not a quote.

Run the same arithmetic at 70 seats and the list cost is US$840 a month, about US$8,470 a year after the same annual discount.

Prices on this page are in US dollars. US buyers usually see a list price with sales tax added at checkout. Canadian buyers may be billed in Canadian dollars or in US dollars, depending on the vendor, with federal and provincial tax added under the rules that apply.

Confirm the billing currency, whether tax is included, and whether the annual price is locked for the term.

Price the exit too

The cost of leaving belongs in the model, because it is the reason people stay on offers they have outgrown.

Before you commit, ask what format exports mail, calendars, and contacts, and whether an administrator can run that export without vendor help.

Ask how long the export takes at your data volume. After termination, ask what happens to your data, how long you have to collect it, and what gets deleted when.

An offer with an ordinary price and an easy exit is usually cheaper over five years than a slightly better price with an export process that requires a support ticket.

Do this next

Fill the model above with real published prices, at your current headcount and at the size you want in three years, before you ask a vendor for a quote.

Non-human addresses are counted in shared mailboxes, aliases and leaver mailboxes; the arrangement underneath the mailbox is priced in the hosting decision; and storage bought here often duplicates storage you already hold, which is covered under file storage you already pay for.

Common questions

Should we commit annually for the discount?

Not in the first year. The discount is real and so is the chance of discovering a problem in month three, and an annual commitment removes your position at exactly the moment you most need one.

Do aliases cost money?

Sometimes, and the answer varies more than any other line here. Count the addresses that no individual reads before you ask, so that the question is specific: does this number of shared and role addresses consume paid seats.

What happens to a leaver's mailbox?

Whatever you decide, it should be a decision rather than a default. Options are to convert it to a shared address, to archive it, or to delete it after a stated period. Each has a different cost and only one of them is free.

Is a cheaper offer with limited storage a false economy?

Usually. Price the growth rate from your own last two years rather than from an assumption, and check what actually happens when a mailbox reaches its ceiling.