Forum Discussion
FY26 CSP Incentives - Ann/Mon & Mon/Mon Subscriptions
Dear community,
We are a Distributor (ex. Ind. Provider) in CSP and we would like you to help us on understanding the changes in our Incentives in FY26.
As announced already, starting October 1, 2025, the FY26 levers and rates will be in place. We would like your assistance to determine the two following use case:
a) one of our Indirect Resellers has a M365 subscription with monthly commitment and monthly payment. Within September 2025, this specific subscription will give us incentives under the FY25 levers and rates (will be recalculated in February 2026 under the FY26 levers and rates). So, based on the announcement, on October 2025, this subscription will start generating incentives under the FY26 levers and rates. Could you please confirm my understanding or reshape accordingly?
b) one of our Indirect Resellers has a M365 subscription with annual commitment and monthly payment, with the renewal of the subscription to be on 15 March 2026. Based on our understanding, until the renewal, this subscription will be generating incentives based on the FY25 levers and rates due to the price protection of the subscription for the whole year, and will switch on generating incentives based on the FY26 levers and rates on the renewal date (i.e., 15 March 2026). Could you please confirm my understanding or reshape accordingly?
Really much appreciated in advance for your significant help on this critical topic for our target setting and business decisions.
Warm regards,
Nick
I have a response from the team!!
a) one of our Indirect Resellers has a M365 subscription with monthly commitment and monthly payment. Within September 2025, this specific subscription will give us incentives under the FY25 levers and rates (will be recalculated in February 2026 under the FY26 levers and rates). So, based on the announcement, on October 2025, this subscription will start generating incentives under the FY26 levers and rates. Could you please confirm my understanding or reshape accordingly?
Answer: Starting October 2025 this M365 subscription will start generating incentives based on the new FY26 CSP incentive partner eligibility, levers, and rates. In February 2026, July-September 2025 earnings generated for this subscription will be reversed and reissued under the new FY26 levers and rates.
b) one of our Indirect Resellers has a M365 subscription with annual commitment and monthly payment, with the renewal of the subscription to be on 15 March 2026. Based on our understanding, until the renewal, this subscription will be generating incentives based on the FY25 levers and rates due to the price protection of the subscription for the whole year, and will switch on generating incentives based on the FY26 levers and rates on the renewal date (i.e., 15 March 2026). Could you please confirm my understanding or reshape accordingly?
Answer: When the annual billing takes place on March 15, 2026, CSP incentives will generate for March 2026 and use the FY26 partner eligibility, levers, and rates. If the billing with Microsoft is monthly (vs annual), a partner would receive July-September 2025 under FY25 eligibility, levers, and rates. Starting October 2025, earnings would be under FY26 eligibility, levers, and rates. In February 2026, July-September 2025 earnings generated for this subscription will be reversed and reissued under the new FY26 levers and rates.
8 Replies
Hi Jill,
Im very interested in one sentence:
"earnings generated for this subscription will be reversed and reissued under the new FY26 levers and rates"
This would mean for partners that after closing the books on a certain year (CY2025) they can be confronted with possible changes (up ánd down) in earnings which will be corrected in that running year (CY2026)
Extra earnings never a problem, less earnings corrected later bit more of a problem...Could the team shed some light on how those corrections will be applied after Feb 2026?
Kind regards,
Martijn
- JillArmourMicrosoft
Community Manager
Their response:
When July - September 2025 earnings are recalculated with FY26 levers and rates, if it results in lower earnings, that balance will be applied towards future earnings. If it results in higher earnings, those will be paid out by February 15, 2026.
- JillArmourMicrosoft
I have a response from the team!!
a) one of our Indirect Resellers has a M365 subscription with monthly commitment and monthly payment. Within September 2025, this specific subscription will give us incentives under the FY25 levers and rates (will be recalculated in February 2026 under the FY26 levers and rates). So, based on the announcement, on October 2025, this subscription will start generating incentives under the FY26 levers and rates. Could you please confirm my understanding or reshape accordingly?
Answer: Starting October 2025 this M365 subscription will start generating incentives based on the new FY26 CSP incentive partner eligibility, levers, and rates. In February 2026, July-September 2025 earnings generated for this subscription will be reversed and reissued under the new FY26 levers and rates.
b) one of our Indirect Resellers has a M365 subscription with annual commitment and monthly payment, with the renewal of the subscription to be on 15 March 2026. Based on our understanding, until the renewal, this subscription will be generating incentives based on the FY25 levers and rates due to the price protection of the subscription for the whole year, and will switch on generating incentives based on the FY26 levers and rates on the renewal date (i.e., 15 March 2026). Could you please confirm my understanding or reshape accordingly?
Answer: When the annual billing takes place on March 15, 2026, CSP incentives will generate for March 2026 and use the FY26 partner eligibility, levers, and rates. If the billing with Microsoft is monthly (vs annual), a partner would receive July-September 2025 under FY25 eligibility, levers, and rates. Starting October 2025, earnings would be under FY26 eligibility, levers, and rates. In February 2026, July-September 2025 earnings generated for this subscription will be reversed and reissued under the new FY26 levers and rates.
Hi Nick,
Based on my interpretation my 2c's:
A) yes, based on the CSP incentives FY26 walking deck / MCI guide October would be first month with FY 26 rates & rules
B) no. Incentives are based on billed revenue; and after October new rates/policies apply regardless of what price the subscription was purchased for. Eligibility for incentives might change, the rate stayed the same so I would focus on eligibility first, not the rates.
Regards,
Martijn
Incentives are separate from, and not included in the subscription price protection. Thus as of October all partners will earn incentives (if eligible) on all customers and subscriptions based on the FY26 Guide. So point B is incorrect.
Point A is correct, but that's irrespective of the commitment term. As mentioned, as of October all incentives will be earned based on FY26 Guide.
MartijnElfers much appreciated for your reply. What are you saying is that incentives have nothing to do with the subscription term. Either annual/annual, annual/monthly or monthly/monthly subscriptions will turn to FY26 guide starting Oct. 1, 2025. Is my understanding correct???
TBH, I had the opinion that an annual/annual & annual/monthly subscription will generate FY26 incentives on its renewal after Oct. 1, 2025.
Thank you in advance!
Correct, incentives have nothing to do with the subscription term. Incentives are not part of price protection of a subscription.
Incentives are earned based on billed revenue and depended on partner eligibility. If you lose eligibility, you lose the incentives. If incentive percentages change, this will be in effect as of change date, regardless of subscription terms.
- JillArmourMicrosoft
Hello nick_Anag, I have forwarded this to the team, I will let you know what they respond with! - jill
