Microsoft 365 Copilot pricing, explained
Copilot pricing has two parts, and mixing them up is where budgets go wrong. There is a fixed per-user seat, and there is usage-based billing for Cowork and agents. Here is how each works.
Part 1: the Copilot seat
Microsoft 365 Copilot is an add-on that lists at about $30 per user per month on an annual commitment. It requires an eligible base license first. Eligible plans include Microsoft 365 Business Basic, Business Standard, and Business Premium; Microsoft 365 E3, E5, F1, and F3; and Office 365 E1, E3, E5, and F3. If you already hold one of these, an existing Office 365 E3 or E5 included, you do not need to upgrade just to add Copilot. The seat covers the everyday AI most people mean when they say "Copilot":
| Included in the seat | Billed separately (Copilot Credits) |
|---|---|
| Copilot Chat | Cowork (autonomous multi-step tasks) |
| In-app AI in Word, Excel, PowerPoint, Outlook, Teams | Work IQ APIs in custom agents |
| Researcher, Analyst, and Facilitator agents | Copilot Studio agents |
| Copilot Notebooks and Copilot Search | AI features in Dynamics 365 and Power Platform |
Part 2: Cowork and Copilot Credits
Cowork is the agentic mode that takes multi-step actions across your files and apps. It is not a per-seat price. It requires a Copilot license, then bills on Copilot Credits at $0.01 per credit. You pay for the work performed, like a metered utility bill.
Microsoft's planning ranges per task:
| Task type | Credits per task | Rough cost at $0.01 |
|---|---|---|
| Light (weekly status, simple drafts) | 100 to 300 | $1 to $3 |
| Medium (meeting prep, briefing docs) | 300 to 700 | $3 to $7 |
| Heavy (large data analysis) | 700 or more | $7 or more |
Ranges are Microsoft planning estimates and assume a frontier model; a lighter model is designed to cost less. Credits pool at the tenant level. Confirm current figures with your Microsoft partner.
Pay-as-you-go vs prepaid
Credits are pay-as-you-go at $0.01 each with no commitment. A 1-year Pre-Purchase plan discounts them from 5% (starting around 300,000 credits per year) up to 20% at very high volume. Admins can set spending limits and alerts, and usage stays off until it is switched on, so there are no surprise bills.
Estimate your Cowork costFree estimator: enter your users and usage, see the monthly range and prepaid savings.Common questions
Do I need a base license to buy Copilot?
Yes. Microsoft 365 Copilot is an add-on to an eligible base plan. Eligible plans include Microsoft 365 Business Basic, Business Standard, and Business Premium; Microsoft 365 E3, E5, F1, and F3; and Office 365 E1, E3, E5, and F3. An existing Office 365 E3 or E5 plan qualifies, so you do not need to move to Microsoft 365 E3 or E5 just to add Copilot.
Does using Copilot in Word or Outlook cost credits?
No. Native Copilot experiences are covered by the per-user seat. Credits only apply to metered work like Cowork, Work IQ APIs, and custom agents.
What is the difference between Copilot Chat and Microsoft 365 Copilot?
Copilot Chat is the chat experience. The paid Microsoft 365 Copilot seat adds the in-app AI across the Office apps plus the built-in Researcher, Analyst, and Facilitator agents.
Is Cowork included?
No. Cowork requires a Copilot license but bills separately on Copilot Credits. Researcher, Analyst, and Facilitator stay included in the seat.