What Microsoft Copilot actually costs.
Copilot has two cost models that confuse people: a flat per-seat license for the everyday assistant, and brand-new usage-based billing in Copilot Credits for agentic work like Cowork. The second one — metered, pay-as-you-go — is where finance teams get nervous. Here's how both work, what a task costs, and exactly how to cap spend. Real June 2026 numbers.
01 The flat part: per-seat licenses
The core Copilot assistant (in Outlook, Word, Excel, Teams) is priced per person, per month — predictable and flat, no metering.
| License | Price | Notes |
|---|---|---|
| Copilot Pro (individual) | $20 / mo | Consumer plan for personal M365 |
| M365 Copilot (business) | ~$18 / seat / mo | Annual; on top of a qualifying M365 license |
| M365 Copilot (enterprise) | $30 / seat / mo | Add-on to enterprise M365 |
With per-seat, an individual prompt has no marginal cost — you've already paid for the seat. Simple and budgetable.
02 The new part: Copilot Credits (usage-based)
For agentic experiences — starting with Cowork (and the Work IQ API) — Microsoft now bills by actual usage in Copilot Credits, a common currency priced at $0.01 per credit. This is the model to understand, because it scales with use rather than seats.
A "task" is a whole multi-step job the agent runs — and it burns credits by complexity:
| Cowork task | Credits | ≈ Cost (at $0.01) |
|---|---|---|
| Light | ~70–200 | ~$0.70–$2.00 |
| Medium | ~400–600 | ~$4–$6 |
| Heavy | 1,500+ | $15+ |
Billing starts July 1, 2026. Tenants with a Frontier-program user who used Cowork between March 30 and June 16 get a grace period and aren't billed until then. The model you assign to a task (OpenAI, Anthropic, Google, or xAI) also affects how many credits it burns — heavier models cost more per task.
03 Prepaid vs pay-as-you-go
- Pay-as-you-go: maximum flexibility — you pay for exactly what you use at $0.01/credit.
- Prepaid (P3): commit to a usage volume up front in exchange for a discount — better if you can forecast usage.
04 How to not get a surprise bill
This is the part that matters most for businesses, and Microsoft built real controls into the M365 admin center's Cost Management dashboard:
- Hard caps — set a spending ceiling so usage simply stops at your limit.
- Budgets & alerts — get warned before you approach a threshold.
- Policies — control who can consume credits, how much, and where it's allocated.
- Consumption reporting — drill into usage by user, group, or service to find cost drivers.
Per-seat Copilot is predictable; Cowork credits are powerful but metered. The fear of "uncapped AI billing" is real — but Microsoft gives you hard caps and budgets, so set them on day one. Estimate a few light tasks at ~$1 each, mediums at ~$5; heavy automations are where it adds up. Use the cost dashboard from the start, not after the first big invoice.
Model your Cowork task volume — light/medium/heavy — and see the monthly cost in our free calculator, alongside every other tool.
Open the AI Cost Calculator →Before Cowork billing starts
If your org uses Cowork, do two things before July 1: (1) set a hard cap and a budget alert in the M365 admin Cost Management dashboard, and (2) estimate your monthly task mix so the first invoice isn't a surprise. Five minutes now saves a finance conversation later.
Estimate your Cowork cost →What you can do now
- Separate the two models: per-seat (flat) vs Copilot Credits (usage-based)
- Read Cowork task costs: light ~$1, medium ~$5, heavy $15+
- Know billing starts July 1, 2026 (Frontier grace period)
- Choose prepaid (P3) vs pay-as-you-go based on whether you can forecast
- Set hard caps + budget alerts in the Cost Management dashboard now