Past your storage pool, Microsoft bills every extra gigabyte, and that SharePoint storage cost is one of the highest per-gigabyte rates on your cloud bill. This guide explains what your licence includes, what Microsoft charges beyond it, the yearly bill at 1, 5 and 10 TB over quota, and the cost of putting the same old files in cheaper cloud storage.
What’s included in your licence
SharePoint storage in Microsoft 365 is pooled across the whole organisation. Its size depends on how many licences you hold. The widely cited formula is 1 TB of base storage plus 10 GB per licensed user. A 300-user organisation gets roughly 1 TB + 3 TB = 4 TB. Microsoft’s own documentation says the storage “is based on the number of licenses you have” and that all sites draw from one central pool, with individual sites capped at 25 TB (25,600 GB) each.
The pool fills faster than most budgets allow, because documents aren’t the only thing counted. Version history counts too. In many libraries, every saved version is a full copy. The two-stage recycle bin counts, and so do the SharePoint sites behind Teams channels. And because the pool is shared, one department’s runaway site eats room meant for everyone. Most organisations find the limit when an admin sees the “storage is almost full” banner. By then, every quick option costs money.
Take a 500-user organisation. Its pool is 1 TB + (500 × 10 GB), or about 5.9 TB. That sounds generous until you remember it covers every SharePoint site and every Teams channel’s library, old versions included. Add a few busy project sites full of video and years of version history, and a mid-size business can be over the line within a couple of years without anyone doing anything wrong. From then on, every extra gigabyte is billed at the rate below.
The Office 365 Extra File Storage add-on, priced out
Once you’re over the pool, Microsoft’s standard answer is the Office 365 Extra File Storage add-on. You buy it in 1-GB increments from the Microsoft 365 admin center. One catch: if you bought your subscription through Volume Licensing or a Cloud Solution Provider, you can’t buy it directly from Microsoft and have to go through your partner.
The list price commonly quoted is US$0.20 per GB per month. Microsoft doesn’t publish a single global number on the buy page, because the rate varies by region and by purchase channel. Treat US$0.20/GB as the reference figure and check your own rate at checkout. At that rate, one terabyte over the allowance (1,024 GB) costs about US$205 a month before tax. That’s the figure to compare with every other option. Your agreement may differ, and the figure on your invoice is the one that matters.
There’s also a newer route. As of June 2026, Microsoft’s pay-as-you-go SharePoint storage is in public preview. It meters the extra storage through an Azure subscription instead of a fixed add-on. The billing method changes. The files stay on Microsoft’s premium-priced storage.
Annual SharePoint storage cost at 1, 5 and 10 TB over quota
US$0.20 a gigabyte sounds small. Over a year, it isn’t. At the US$0.20/GB/month reference rate, the Extra File Storage add-on costs:
- 1 TB over quota: about US$205 a month, or about US$2,458 a year.
- 5 TB over quota: about US$1,024 a month, or about US$12,288 a year.
- 10 TB over quota: about US$2,048 a month, or about US$24,576 a year.
And the bill usually grows. Company data accumulates, so this year’s 5 TB over quota may be 8 TB next year. The add-on is a recurring charge that rises with storage, often paying for files nobody has opened in a year or more. Put your own figures into the SharePoint storage cost calculator to see where you land.
What the same terabyte costs in cheaper cloud storage
The old files behind your extra-storage charge don’t need SharePoint’s premium, instantly editable storage. They need to stay safe and come back when someone asks for them. That’s the job of S3-compatible object storage. It’s plain cloud storage sold by the terabyte, available from many providers and usually priced well below Microsoft’s rate. Each provider publishes its own pay-as-you-go price per terabyte. Some also charge for downloads or API requests, so read the full price list. The cheapest headline rate isn’t always the cheapest bill.
Compare that with the Microsoft add-on. At US$0.20/GB for SharePoint’s extra storage against your chosen provider’s published rate, moving old files off SharePoint is usually the cheapest option you have. Microsoft’s own cold tier, Microsoft 365 Archive at US$0.05/GB/month, keeps the files inside Microsoft. That’s still well above plain cloud storage. We compared the two in Microsoft 365 Archive vs third-party archiving.
Cheaper storage trades instant editing for a restore-then-open step. Some providers also attach conditions worth reading, such as a minimum storage period for files deleted early. For files nobody touches, that trade is usually fine. Keep active document libraries in SharePoint, and move the old files that are inflating the bill.
Move cold files out of SharePoint and keep them restorable
When the banner appears, the first instinct is to delete: trim versions and hunt for duplicates. Those clean-ups buy a quarter, then normal work fills the pool again. The real problem is old files sitting on premium storage. The lasting fix is to move them to cheaper cloud storage and leave a link file where each one was, so people can see where it went and restore it. The original is removed from SharePoint only after its stored copy has been read back and checked against it.
That’s ArchiveBridge’s job. It copies each old file to cheaper storage, reads the copy back and checks its SHA-256 fingerprint against the original’s. If the fingerprints match, it writes a link file where the file was. Only then does it remove the SharePoint original. The cost changes from Microsoft’s rate of about US$205 per terabyte a month to US$24 per terabyte a month for management with your own storage, and your storage provider bills you for the storage directly. Or it’s US$35 per terabyte a month all-in if we run the storage. Both prices are before tax, with one flat rate for every terabyte. At the all-in rate, 5 TB costs about US$2,100 a year, compared with roughly US$12,288 for Microsoft’s extra storage. That’s a list-price comparison for the same 5 TB. Your own bill will differ, and the calculator shows the full cost.
ArchiveBridge is free under 100 GB, with no card and no time limit. Above 100 GB you pay for what you store. We measure it every day and charge for each day at the published price per TB, automatically, to your card. Month to month, no lock-in.
The caveat: archiving adds another supplier and another admin approval, and archived files sit outside Microsoft’s compliance tools. While a file is archived, SharePoint search finds only its link file, by name, not the words inside it, and old links to it won’t open it. After a restore it’s back at the same path, but old sharing links don’t come back. ArchiveBridge skips files whose retention label locks them as a record. It doesn’t read legal holds or retention policies, so keep sites under a hold out of scope. Its backups still copy held, labelled and record-locked files, because a backup never changes or removes anything. If you’re only slightly over and the gap is shrinking, Microsoft’s built-in tier may be simpler. If old files are a large, growing line on your bill, the maths favours moving them.
Either way, decide on your own numbers. A free scan works them out before a single file moves. To see what it produces, open the two samples, made from one fictional company’s data. The indicative business case (PDF) prices backing up everything Microsoft reports, at A$189.50 a month. The measured business case (PDF) prices archiving only the files that match the 2-year rule, at A$118.50 a month.