Published: 17 August 2026. For years, SharePoint Online storage worked the same way: you got a base quota calculated from your licenses, and if you needed more, you bought the Office 365 Extra File Storage add-on in fixed increments. Starting in September 2026, Microsoft is adding a third path: a consumption-based pay-as-you-go meter that charges only for what you use beyond your included quota, measured per gigabyte per month. Microsoft announced the change in Message Center notification MC1330893, updated June 8, 2026.
Source: MC1330893 - Microsoft 365 Message Center | Roadmap ID: 506743
How the pay-as-you-go storage meter works
The new billing model is opt-in. It is not enabled by default and does not activate automatically when your tenant approaches its quota limit. To use it, a Microsoft 365 administrator must configure a billing policy that links SharePoint to an Azure subscription. Once that policy is in place, any storage consumption beyond your included tenant quota is automatically measured and billed at the end of each billing period.
| Factor | Details |
|---|---|
| Availability | Public Preview: June 2026. General Availability (worldwide): September to October 2026. |
| Opt-in requirement | Must be enabled explicitly by an admin via a billing policy linked to an Azure subscription. Not auto-enabled. |
| What triggers charges | Storage consumption above the tenant's included quota. The included quota is calculated from your Microsoft 365 licenses (1 TB base + 10 GB per eligible user license). |
| Billing model | Usage-based, measured per GB per month. Charges appear on your Azure invoice for the linked subscription. |
| Exclusions | Education tenants are currently not eligible. GCC and sovereign cloud environments are also excluded at launch. |
| Multi-Geo tenants | Billing is based on each geo's storage quota and usage separately, starting June 2026. |
Pay-as-you-go versus the Extra File Storage add-on
Both options address the same problem: your tenant has used more storage than your licenses provide. The right choice depends on how much you need and how stable that need is.
| Factor | Extra File Storage add-on | Pay-as-you-go meter |
|---|---|---|
| Purchasing model | Fixed increments, purchased in advance | Measured monthly, charged in arrears |
| Billing location | Microsoft 365 admin centre / Microsoft account | Azure subscription invoice |
| Best for | Stable, predictable storage needs above quota | Variable overages, one-off projects, or testing storage reduction before committing |
| Admin prerequisites | Microsoft 365 billing role | Azure subscription + Microsoft 365 billing role |
| Flexibility to remove | Cancel at renewal | Stop billing by disabling the billing policy |
For most organisations already managing storage carefully, the pay-as-you-go option is most useful as a temporary buffer during a migration or large content ingestion rather than as a permanent solution. Reducing storage consumption before it triggers charges remains the better long-term position. The guide on reducing SharePoint storage quickly covers the fastest approaches, including version trimming and bulk image reduction.
What admins should do before general availability
Even if you do not plan to enable the pay-as-you-go meter, brief finance and procurement before September. A new Azure-billed cost category will appear in your tenant once GA arrives, and teams that monitor Azure spend closely should know about it before it shows up on an invoice.
- Check your current storage position. In the SharePoint admin centre, go to Settings > Storage limits to see your total quota and current consumption. Understanding how close you are to the limit helps you decide whether pay-as-you-go is relevant.
- Confirm your Azure subscription setup. The pay-as-you-go billing policy requires an active Azure subscription with appropriate billing permissions. If your organisation does not use Azure today, setting up the subscription is a separate prerequisite.
- Alert your finance team. If you have unused Azure budget, a billing policy that activates the pay-as-you-go meter could start producing charges automatically once you exceed quota. Finance should know this feature exists before it appears on an invoice.
- Consider whether storage reduction is a better first step. Space Master provides version trimming, image size reduction, and bulk file deletion tools that can significantly reduce a tenant's storage footprint before you need to pay for overages at all. For pricing data on the add-on path, see the SharePoint extra file storage pricing reference.