Important Update: Microsoft FY26 Incentives Now in Effect
Microsoft has published the incentive structure for fiscal year 2026, which has taken effect immediately and may have a major impact on your business. In this new article, we summarize the most important changes in the incentive conditions.
Incentives
The overview below shows the incentives per product group, with the FY25 and FY26 incentives side by side for easy comparison.
Incentives for Business Central
| Incentives FY25 | Incentives FY26 | |
|---|---|---|
| D365 CSP Core incentives | 4.75% | 4% |
| D365 CSP Global Accelerator | 10% | 8% |
| D365 CSP Customer add | 20% | – |
| D365 CSP Growth Accelerator | – | 7.50% |
Incentives for Customer Engagement
| Incentives FY25 | Incentives FY26 | |
|---|---|---|
| D365 CSP Core incentives | 4.75% | 4% |
| D365 CSP Customer add | 20% | – |
| D365 CSP Growth Accelerator | – | 7.5% |
Incentives for Unified Operations
| Incentives FY25 | Incentives FY26 | |
|---|---|---|
| D365 CSP Core incentives | 4.75% | 4% |
| D365 CSP Global Accelerator | 7.5% | 7% |
| D365 CSP Customer add | 20% | – |
| D365 CSP Growth Accelerator | – | 7.50% |
Growth Accelerator replaces the Customer Adds incentive
In FY25, partners with the Customer Adds incentive received an additional 20% incentive when they activated Dynamics 365 for the first time in a customer tenant. This has now ended and is replaced in FY26 by the Growth Accelerator incentive.
Microsoft rewards CSP partners with extra incentives when they achieve growth by increasing CSP revenue compared to the previous year. This is calculated per customer tenant on the basis of year-over-year revenue growth. This means that partners are now rewarded not only for activating new customers, but also for delivering new licenses to existing customers, and even when Microsoft raises its prices.
Incentive payouts
The distribution of incentives remains the same:
- 60% Rebate: paid directly to the partner every month.
- 40% Co-op: must be spent by the partner on marketing and customer-focused activities.
New partner requirements
In FY25, partners qualified for incentives with any Microsoft Designation, or even with a Legacy Silver or Gold Competency. In FY26 this has changed. Only partners with at least 25 points in the Business Applications Designation are still eligible for Business Applications incentives.
This means that only partners truly focused on Dynamics 365 and Power Platform can earn incentives on them. Modern Workplace partners who only transactionally sell D365 licenses will therefore lose their Business Applications incentives.
Incentives per Solutions Area
Microsoft is further splitting incentives across the three Solutions Areas: Azure, Business Applications, and Modern Workplace & Security. You now only earn incentives in the other Solutions Areas if you hold 25 points in that Designation (or the full Designation status).
If you don’t have enough points for MWP or Azure, you will no longer earn incentives on Microsoft 365 licenses and Azure consumption, etc. Microsoft is thereby both raising and lowering the threshold.
Solutions Area requirements
| Solutions Area | Partner Requirement FY25 | Partner Requirement FY26 |
|---|---|---|
| Azure | 1 of the 3 Azure Designations or Legacy Competency | Only an Azure Designation or 25 points in an Azure Designation* |
| Business Applications | 1 of all 6 Designations or Legacy Competency | Only a Business Applications Designation or 25 points in a Business Applications Designation* |
| Modern Workplace & Security | 1 of all 6 Designations or Legacy Competency | Only an MWP or Security Designation or 25 points in those Designations* |
* 25 points in a Designation to be eligible for incentives only applies to CSP Indirect Resellers. For CSP Direct Partners, a Designation is required.
Revenue requirement
- For CSP Indirect Resellers, the revenue threshold remains the same: at least $25,000 in license revenue in the past 12 months (Trailing Twelve Months) to qualify for incentives.
- For CSP Direct Partners, this threshold has increased: at least $1,000,000 in license revenue in the past 12 months (TTM).
Program enrollment
Don’t forget to register your Microsoft PartnerID for the Microsoft Commerce Incentives.
IMPORTANT: Future change, immediate impact!
The most remarkable aspect? The new FY26 incentive terms and requirements apply retroactively as of July 1, 2025. Microsoft has never done this before, and in the Incentive Guide update less than two weeks ago, none of this was mentioned. In the newly updated Incentives Guide, a correction has therefore been made with retroactive effect and immediate impact on your business.
Microsoft will still apply the old FY25 requirements and percentages for the period July 1 through September 30, 2025. But beware: in February 2026 Microsoft will perform a recalculation based on the new FY26 incentive percentages for the same period. At that point Microsoft will recalculate and adjust the incentives already paid. Microsoft may reclaim incentives from you!
Additionally, the incentive payouts for October and November 2025 will be delayed until January 2026. No reason is provided for this, but it is important to note, as this creates a gap. This applies to all Microsoft verticals.
What does this mean for you?
Microsoft may reclaim incentives that were paid out earlier. If you do not meet the new FY26 requirements? Don’t worry, for the July–September 2025 period Microsoft will still apply the FY25 conditions. So, you will keep your right to incentives.
But if you received too many incentives based on the new FY26 incentive structure, the excess amount for the July–September 2025 period will be reclaimed in February 2026.
Potentially more Azure incentives
The changes may also mean that you qualify for Azure incentives. In FY25, an Azure Designation was required, but in FY26 it is sufficient to earn 25 points in one of the Azure Designations. As a result, after the recalculation in February 2026, you may still receive Azure incentives for the July–September period and beyond.
Read our other articles for more information on the incentive changes for Azure and for Modern Workplace & Security.
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