You still pay a monthly fee for the everyday helper. The new helpers that do long jobs for you are paid a bit at a time, every time they work.
Since September 2026 Microsoft prices Copilot in two parts. The per-user licence covers everyday things like chat and Copilot in Word or Teams. Newer agent features, such as Cowork, Code and Autopilot, are paid by use with Copilot Credits, and admins have to switch that on and set limits.
Microsoft's model is now USL plus UBB. The Copilot user subscription licence covers Chat, in-app Copilot, model choice and Auto. Cowork, Code, Autopilot, frontier models, and advanced work in SharePoint and OneDrive consume pooled Copilot Credits, governed by spending policies in Microsoft 365 admin center Cost Management. Note: policies auto-apply to new services by default.
Two ways of paying
Microsoft's 25 September 2026 announcement set out a split. In its words, for everyday AI "you want the best possible quality at a fixed cost", and a user subscription licence provides that: Copilot in Chat and across Word, Excel, PowerPoint, Outlook and Teams, model selection, and Auto, which picks a model for each request. Agentic work "requires a different type of spend", and Microsoft says Cowork, Code, Autopilot and frontier models all run on usage-based billing.
Usage-based billing is paid in Copilot Credits, which Microsoft describes as the common currency across Cowork, Copilot Studio, Power Platform workloads and Work IQ APIs. Credits are pooled across the tenant. Microsoft's pay-as-you-go rate is $0.01 per credit.
What sits where
| Paid by the licence | Paid in Copilot Credits |
|---|---|
| Chat grounded in work data | Cowork |
| Copilot in Word, Excel, PowerPoint, Outlook and Teams | Code and apps run on Copilot Managed Runtime |
| Model selection and Auto | Autopilot |
| Licensed users' use of employee-facing Copilot Studio agents | Advanced work in SharePoint and OneDrive |
| Work IQ API for custom apps and agents |
The right-hand column is drawn from Microsoft Learn's list of services managed by usage-based billing, plus the blog's statement about Code and Autopilot. Microsoft's Learn page notes that Cowork and advanced work in SharePoint and OneDrive also need a Copilot licence. So for those, it's a licence and credits together.
Nothing is on until an admin turns it on
Usage-based billing in the Microsoft 365 admin center is governed by spending policies, under Copilot, then Cost Management. A policy names who can use which services and sets limits for the policy and for each user. For Cowork, Microsoft's documentation is explicit that the policy is the access control: anyone in scope of a policy that selects Cowork can use it, however small their limit.
One default deserves attention. Microsoft says spending policies have an "Auto-apply new services" setting that's on by default, so future supported services and agents inherit the policy. That's convenient. It also means a new metered service could become available to a group without a fresh decision. I'd turn it off for broad policies and add services deliberately.
A worked example
These numbers are illustrative. A 200-person organisation has 60 Copilot licences. It wants Cowork for 20 of those licensed people, with a limit of 3,000 credits each a month.
| Item | Monthly cost |
|---|---|
| 60 licences at £23.10 (UK list, paid yearly) | £1,386 |
| Cowork ceiling: 20 × 3,000 credits × $0.01 = $600, at $1 = £0.77 | up to about £462 |
| Total ceiling | about £1,848 |
The licence line is fixed. The Cowork line is a ceiling, and actual spend depends on how much the 20 people delegate. That second line needs a weekly look, as in The 20-minute weekly review agenda.
What I'd do now
Check which of the right-hand services anyone in your organisation can reach today. Decide who should have Cowork, set a group and limits, and turn off auto-apply on broad policies. Then compare licence and metered costs for your light users, as in Seat licence or Copilot Credits: the break-even.
What I'm still checking
Microsoft's message centre posts about this change (MC1479276 and MC1479277) say usage-based billing rolls out in Copilot during the fourth quarter of 2026, and that Code and Autopilot need a Copilot licence plus a spending policy. I've only read those posts through a third-party mirror, so check them in your own admin centre before relying on them. Enterprise agreement prices may also differ from the list price.
Sources
- Official Microsoft Blog, Introducing the new Copilot with Home, Code and Autopilot, 25 September 2026, accessed 11 October 2026.
- Microsoft Learn, Understand usage-based billing and cost management for Copilot Credits, accessed 11 October 2026.
- Microsoft Learn, Usage-based billing: what you see in the Microsoft 365 admin center vs. your Azure bill, accessed 11 October 2026.
- Microsoft Learn, Manage Copilot Cowork for your organization, accessed 11 October 2026.
- Microsoft UK, Microsoft 365 Copilot plans and pricing for enterprise, accessed 11 October 2026.