The cost of sending a letter within the Isle of Man or to the UK is set to rise by five pence from 6 April.
Isle of Man Post Office said the increase was "regrettably inevitable" as mail volumes decline, leading to a fall in revenues.
The price of posting a standard letter will increase from 57p to 62p, less than a year since a similar increase.
International mail costs will rise by just under 5%, parcels 4%, and 1.5% on guaranteed next day deliveries.
Between 2016 and 2018, average use of postal services dropped by 7% year-on-year.
Bosses said that without shrinking overheads and making price increases, losses to the post office retail arm would be expected to rise to £1.7m by 2023-24.
A modernisation of post office retail services, which includes the possible replacement of some sub-post office counter services with self-service kiosks, was approved by Tynwald in October.
Post office chairman Julie Edge MHK said the changes would enable the organisation to maintain its "self-funding status".
"With mail volumes continuing to decline and an increase in overall operational costs, price increases are regrettably inevitable," she added.
Jason Moorhouse MHK said price rises were "never welcomed" and could "simply encourage people to use other forms of communication".
He continued: "It is a commercial decision, but I fear the impact will be greatest on business users who will simply have another reason to revaluate their use of on island postal services."
The cost of sending a standard letter in the UK will rise from 70p to 76p in April.