Google Workspace vs Microsoft 365 for Small Business (2026)

For most Australian small businesses either platform does the job, so the real decision is which apps your team knows and how much control you need over devices. Google Workspace is usually the smoother, slightly cheaper choice for a small crew that works from phones and a browser. Microsoft 365 wins when your business runs on Excel, Word and Outlook, when clients and accountants send you .docx and .xlsx files all day, or when you need to lock down laptops properly.

Google Workspace vs Microsoft 365 at a glance

What the plans cost in Australia

All prices below are AUD per user per month, excluding GST, on a one-year commitment (as at September 2026). Both vendors charge roughly 20% more if you pay month to month, and Microsoft raised Australian prices on 1 July 2026.

Google Workspace

Microsoft 365

Two things trip people up here. Microsoft's Apps for business plan looks like a bargain until you realise it has no mailbox attached — it's the desktop programs only. And Business Basic gives you the browser versions of Word and Excel, not the installed ones, so anyone who needs proper Excel is on Standard at $21.

If you're registered for GST, you claim the GST back on both, so compare the ex-GST figures. If you're under the $75,000 threshold and not registered, add 10% to everything above.

Stop running your business off @gmail.com

Moving to email on your own domain is the single change with the biggest payoff, and it costs about $120 a year per person at the entry tier. The reason isn't that a free address looks unprofessional, though it does. It's that you can't administer it.

With a paid tenancy, an administrator can reset any staff password, suspend an account the hour someone resigns, and export that mailbox afterwards. With a personal Gmail or Hotmail, none of that exists. If the account gets locked, or the person who created it leaves on bad terms, your quotes, invoices and client history go with them.

Your own domain also lets you set up SPF, DKIM and DMARC records so your invoices land in inboxes rather than spam folders. And because email is a business record, mixing it into a personal account makes the ATO's five-year record-keeping requirement far harder to satisfy. If you don't have a domain yet, sort that out first — the DIY website guide covers registering a .com.au.

You don't need a paid seat for every address, either. Google Workspace allows up to 30 aliases per user at no extra cost, and Microsoft shared mailboxes don't need their own licence as long as they stay under 50 GB. So info@, accounts@ and sales@ can all land in one person's inbox without a second bill.

The apps: Docs and Sheets vs Word and Excel

Google's apps are better at collaboration and worse at heavy lifting. Two people editing the same quote at once just works, the mobile versions are genuinely usable, and anyone with a free Google account can open a document you share without buying anything. If your team writes proposals, keeps job lists and tracks a few hundred rows of data, Sheets is more than enough.

Microsoft's apps are better at heavy lifting and worse at collaboration. Real Excel handles large datasets, complex formulas, pivot tables and macros that Sheets will either choke on or convert badly. Every accounting package exports to Excel format, most industry templates you'll be handed assume Excel, and if you send contracts as .docx where formatting matters, desktop Word won't quietly reflow your layout.

Google Workspace opens and edits Office files directly these days, so the incompatibility argument is weaker than it was. But "can open" isn't "round-trips perfectly", and a spreadsheet that bounces between Sheets and Excel a few times will lose something.

Meet vs Teams

Google Meet is the simpler product. You send a link, the other person clicks it in a browser, and the meeting starts — no install, no account. For client calls with people who use different systems, that friction-free join is worth a lot. The catch is Business Starter: 100 participants is plenty, but there's no meeting recording at all on the entry plan, which surprises people who wanted to record training sessions or client briefings.

Teams is more than a meeting tool. It's persistent chat channels, shared files and calls in one place, which is genuinely useful if you want an internal workspace rather than a video app. It's also heavier: external guests are usually pushed toward installing the app and signing in, and small teams often find Teams' channel structure more machinery than they need. Business plans support up to 300 meeting participants.

Be honest about how your team actually communicates — plenty of small businesses run internal chat on WhatsApp regardless, which makes Teams' main advantage moot.

Security, MFA and who's in charge

Both platforms let you enforce multi-factor authentication on every account on every plan, and doing so is the highest-value hour you'll spend on cyber security basics. Turn it on before you worry about anything else on this list.

Above that baseline the platforms diverge. Microsoft 365 Business Premium bundles Intune for device management, Entra ID P1 for conditional access and Defender for Business for endpoint protection — the controls that let you wipe a stolen laptop or block overseas sign-ins. Google puts its equivalents further up too: advanced endpoint management and Vault sit on Business Plus.

Where your data actually sits

This is the one clear, practical difference for Australian businesses. For a Microsoft 365 tenancy set up with an Australian billing address, Exchange mailbox content, SharePoint and OneDrive files and Teams chat messages are stored at rest in Microsoft's Australian datacentre regions. Google Workspace's data regions feature only offers the United States or Europe — Australia isn't an option — and on the Business range it's only available from Business Plus anyway.

For most small businesses this changes nothing. If you tender for government work, handle health records, or have clients who ask where their data lives, it decides the question on its own.

Which one suits your business

Here's what the same team costs on each platform over a year, in AUD excluding GST.

Google is cheaper at every tier, but by so little that price shouldn't decide it. That eight-person gap works out at $16 a month across the whole business, which buys nothing if half your team can't find anything.

Choose Google Workspace if your crew works from phones and utes, you want people running with no software to install, your document work is quotes and job sheets rather than modelling, or everyone's already on Gmail personally. Tradies, cafes, salons, allied health practices and most service businesses under about ten people fall here.

Choose Microsoft 365 if your work genuinely lives in Excel, you exchange formatted documents with accountants and lawyers constantly, you've got Windows laptops to manage centrally, you already own Office licences and skills, or data residency matters to your clients. Bookkeepers, consultancies, engineering and construction offices and anyone who tenders to government land here.

Either way, check the rest of your tools first — accounting, CRM and payments all connect more easily to one side or the other, as the essential software stack guide walks through.

Switching: what a migration actually involves

Mail, calendar and contacts migrate reasonably well in both directions using the vendors' own tools. Files are where it gets untidy: anything built on Google Apps Script or Excel macros generally has to be rebuilt, and shared-link permissions rarely survive intact.

A workable sequence is to set up the new tenancy and add users, run the mailbox migration while the old system is still live, test with two or three people for a week, then change your MX records last so mail flow cuts over in one step. Keep the old subscription running for a month afterwards in case something was missed.

Past about five mailboxes, pay an IT provider for the cutover. It's a few hundred dollars against a week of bounced client email.

Key takeaways

• Google Workspace lists at $9.90, $19.80 and $30.90 per user per month ex GST; Microsoft 365 Business at $10.50, $21.00 and $32.90 (as at September 2026, one-year commitment). The gap is too small to decide on.
• Microsoft 365 Business Basic gives you browser Office only — you need Business Standard at $21.00 for installed Word and Excel.
• Getting off @gmail.com matters because you can't administer a free account: no password resets, no locking out a departed staff member, no recovering the mailbox.
• Microsoft stores core data at rest in Australia for Australian tenancies; Google's data regions only offer the US or Europe.
• Turn on multi-factor authentication for every user on day one, whichever you choose. It's free on every plan.
• Both cap at 300 users, and both let you add extra addresses as aliases or shared mailboxes without paying for another seat.

Where to get help

For pricing and plan detail, check the vendors directly — Google Workspace at workspace.google.com and Microsoft 365 at microsoft.com/en-au. Both offer free trials, and running two or three people on a trial for a fortnight tells you more than any comparison table.

For setup and migration, an IT or managed service provider handles cutovers routinely; ask for a fixed quote covering mailbox migration, MX change and user training. The Australian Signals Directorate's Australian Cyber Security Centre publishes free small business guidance at cyber.gov.au. And your accountant or bookkeeper is worth a five-minute call first, because their systems may work far better with one than the other.