Starting in early December, Microsoft will enable consumption-based billing by default for new Copilot Business licenses purchased through a CSP partner. Alongside the fixed monthly fee, a meter will be introduced to bill for agent features like Cowork based on usage. Above IT ’consigliere’ Matias Haapaniemi explains in this blog post what the change means in practice and which settings should be checked before December. So, keep reading!
What is changing?
Microsoft informed its partners in September that consumption-based billing will be enabled by default for new Copilot Business licenses in the future. The original start date was November 2, 2026, but in the October announcement, the schedule was moved to start on December 1, 2026.
Copilot Business is the version of Microsoft 365 Copilot aimed at SMEs for organizations with up to 300 users. The change applies to:
- New purchases starting December 1, 2026. This includes both standalone Copilot Business licenses and bundles that include Copilot.
- Purchases made through a CSP partner. For licenses purchased directly from Microsoft, the change starts earlier, on October 19, 2026, according to Message Center announcement MC1476200.
- Finland as well. The change will initially not be implemented in 11 countries, such as Germany, France, and the Netherlands, but Finland is not on this list.
With the new license, Microsoft automatically creates the Azure resources required for billing and implements a ready-made spending policy. Its default limit is 4,000 credits per user per month. An administrator can change the limit. The benefits and payment terms of existing subscriptions will not change, but the tenant’s old Copilot licenses will still not be excluded from the change, as I will explain below.
How much can the meter show?
Copilot Credits is Microsoft’s common billing unit for consumption-based AI services. According to the Copilot Credits licensing guide, one credit costs approximately 0.87 cents at Microsoft’s euro-denominated list price ($0.01) when billed based on consumption. The final price depends on the partner’s pricing.
The default limit therefore means a maximum of approximately €35 per user per month. For comparison, the list price for a Copilot Business license is €18.20 per user per month with an annual commitment (promotional price €15.60 for the first year until December 31, 2026), so the meter’s cap is nearly twice the price of the license. For example, in an organization with 25 users, the cap is 100,000 credits, or approximately €870 per month.
Important clarification: the limit is a cap, not a bill. If no one uses Cowork, the meter stays at zero.
There is no single answer to the cost of an individual task. Consumption consists of four factors: the AI model, the execution environment, context retrieval, and the use of tools. In Microsoft’s own examples, simply building an application with Cowork consumes from about 250 to over 1,350 credits, depending on the complexity of the application. Running a finished application costs an additional 10 to 5,000 credits per month, depending on the size of the application.
You can estimate your own organization’s usage with Microsoft’s Copilot Credit Estimator tool. If usage is high and predictable, credits can also be purchased a year in advance (Pre-Purchase Plan or P3). The discount is between 5 and 20 percent depending on the amount, but unused credits expire at the end of the term.
What is included in the license and what is paid for separately?
The line is drawn roughly between the everyday assistant and independently working agents. The licensing guide speaks about the Microsoft 365 Copilot license in general and does not differentiate Copilot Business, but according to it, the division is currently as follows.
Included in the monthly fee:
- Copilot Chat and Copilot in Word, Excel, PowerPoint, OneNote, Outlook, and Teams
- Microsoft’s own agents, such as Researcher, Analyst, and Facilitator
- Context provided by Work IQ from emails, calendars, and files within Copilot
- Agents built with Copilot Studio Standard and Copilot Chat harness in Microsoft’s own channels within fair use limits
- Older Retrieval API and Chat API, at least for now
Billed as credits:
- Cowork tasks
- Applications built with Cowork and running them in the Copilot Managed Runtime environment
- Work IQ API calls from custom agents and applications, for example those built with Copilot Studio or Azure Foundry. The Tools API costs 0.1 credits per call.
- Copilot Studio’s GitHub Copilot harness, both building and running agents
- Copilot Studio agents outside Microsoft channels, for example on websites
We wrote about Copilot Studio and agents in more detail earlier in the Era of Agents blog post.
What should be read between the lines?
Here are a few of my own observations:
New services are joined automatically. Spending policies have the Auto-apply new services setting enabled by default. When Microsoft introduces a new consumption-based service, it is added to the same budget without a separate decision. Something new is already coming, as according to Message Center announcement MC1479277, Copilot’s new Code and Autopilot features will also be billed based on usage.
One new license connects the meter to the entire tenant. According to the updated MC1476200 announcement, if a tenant already has Microsoft 365 Copilot users and even one new Copilot Business license is purchased, consumption-based billing is enabled for all Copilot subscriptions in the tenant. If a spending policy has already been created, it remains. If not, the default limit also applies to old users.
The hide setting should not be relied upon. The Admin center setting that allows consumption-based services to be hidden from users does not apply to users for whom a spending policy is in effect. According to MC1479277, the entire setting is also being removed.
The limit cuts off usage mid-month. When the limit is reached, services stop working until the end of the month, and credits reset on the first day of the month. A user can request more credits from the administrator. The limit is a good safety net, but if set too strictly, it can stop important work in progress.
The bill goes through the partner. In the CSP model, the Azure subscription used for billing is linked to the partner’s billing account. Usage will therefore appear on the partner’s invoice alongside the licenses, so reporting and billing should be agreed upon before the first invoice arrives.
Billing alone does not open Cowork. According to the licensing guide, using Cowork requires, in addition to a license and billing, that Cowork is enabled and Anthropic models are allowed in the tenant. Billing being on by default therefore removes one obstacle, not all of them.
Positive Aspects
In all honesty, the change is also a relief for many SMEs. Until now, trying out Cowork has required an Azure subscription, linking it to billing, and building a spending policy before anyone could even start. Now the foundation is ready.
Management tools have also evolved. In the Microsoft 365 admin center’s Copilot > Cost management view, you can:
- limit usage to specific user groups using security groups
- set both organization-wide and user-specific monthly limits
- send alerts to administrators and users when the limit is approaching
- give the finance department read access to reports without the right to change settings
- limit the AI models used by Cowork with model selections (model profiles)
Additionally, pre-purchased credits are always used first before consumption-based billing. The billing method can also be changed afterwards, meaning the choice made at the beginning is not permanently binding.
What to do before December?
If Copilot Business purchases are planned for December or later, make your policies ready now and implement them immediately after the purchase:
- Decide who can use it. According to Microsoft’s own example, the default limit applies to all Copilot Business users. Limit usage if necessary with a security group, for example, to pilot users.
- Scale the limit to your own budget. Estimate usage with the Estimator tool and set limits for the organization and users based on that.
- Check the Auto-apply setting. If you want to approve each new service separately, turn the setting off.
- Enable alerts. Add the finance department as recipients in addition to the administrator.
- Agree on billing with the partner. Find out how usage is reported and at what rhythm it is billed.
Summary
Copilot pricing is moving to two tiers: a fixed license covers the everyday assistant, and independent agent work is billed based on consumption. Billing being on by default does not cost anything in itself, but it changes the starting point.
Previously, billing had to be separately enabled before anyone could consume credits. Now it is on by default unless someone decides otherwise.
I therefore recommend treating the change like any other cloud consumption service. Get limits and monitoring in order before implementation, not only after the first invoice. Ultimately, we as your ’consigliere’ support will ensure that the AI meter does not get out of hand!
Please contact us if you would like to review spending policies in your own environment.
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