Publish Date
11/11/2026
Categories
Blogs
Microsoft is changing how you pay for some Copilot features.
Rather than everything being covered by your licence, certain AI features will use a consumption-based model, where you pay based on usage. This is known as Usage-Based Billing (UBB) and is measured using Copilot Credits.
Microsoft has announced that UBB is expected to be switched on automatically for new Copilot Business purchases between January and March 2027, with the exact date still to be confirmed.
New licences will have a default monthly spending limit of 4,000 Copilot Credits per user (roughly £30). Importantly, this doesn’t mean you receive 4,000 Copilot Credits to use each month.
Copilot Credits are consumed when you use eligible usage-based AI features, and you’ll be charged based on what you actually use. The 4,000-credit figure is simply the default spending limit, helping to prevent costs going beyond this level unless you choose to increase the limit.
Read on to understand how Copilot Credits work, what consumes them and how you can control your spend.
What are Copilot Credits?
Copilot Credits are how Microsoft measures the work AI does for you. The more work an AI feature does, the more credits it uses.
It’s important you know your Microsoft 365 Copilot licence isn’t going away, and you’re not moving to paying for every prompt. Credits sit alongside your licence for the more advanced AI features.
They apply to things like:
- Agents and apps built with Copilot Studio
- Copilot in SharePoint and OneDrive
- Copilot Cowork and Copilot Code
- AI features in Dynamics 365 and Power Platform
- Other AI agents from Microsoft
💡Microsoft states one Copilot Credit = $0.01 USD.
How much does one Copilot Credit get you?
Unfortunately, there’s no single answer.
One credit doesn’t equal one prompt. It all depends how complex the task is. For example, which AI model is being used? Is Copilot having to fetch data from APIs? What other tools are involved?
A quick question uses fewer credits than an AI agent working through several steps. So your cost depends on what you ask AI to do, and how often.
The best way to understand how quickly you’ll use Copilot Credits is to test different tasks and keep a close eye on your usage. Microsoft also has a Copilot Credit Estimator you can use.
How do you pay for Copilot Credits?
There are two main ways to pay:
Pay-as-you-go. You pay for the credits you use. It’s flexible, but you’ll need to keep an eye on usage.
Pre-purchased credits. You buy credits up front. This suits you better if your usage is easy to predict.
Usage-based billing is being switched on automatically
As we mentioned at the start, Microsoft is switching on usage-based billing (UBB). Originally scheduled for December, Microsoft has delayed the automatic switch-on from customer feedback.
It’s now expected between January and March 2027, with the exact date is still to be confirmed.
From then, UBB will be turned on automatically when you buy new Microsoft Copilot Business licences. It isn’t a new way of paying – you can already switch UBB on yourself. The change is that it will be on by default for new purchases.
How to get ready
With the date still to be confirmed, now is a good time to prepare:
- Learn how Copilot Credits get used, so you know what to expect.
- Look at the spending controls and budget tools available to you (for admins, there are cost-management tools in the Microsoft 365 admin centre).
- Make sure the Azure terms for usage-based billing are reviewed and accepted before you buy.
Why keep an eye on usage?
Usage can grow quickly.
Testing an AI agent with 20 people makes the cost look small. But roll it out to hundreds of staff, each using it several times a day, and the same agent is doing far more work, so the bill grows.
That’s why it’s worth working out your likely usage, and setting limits and budgets, before you scale up. Both IT and finance need to see what’s being used and what you’re getting back.
What should my business do now?
- Know where credits apply. Check which Microsoft AI tools you use, or plan to use, and whether they use credits.
- Estimate before you scale. A small test won’t show what hundreds of users will cost. Microsoft’s Copilot Credit Estimator can help you estimate how many credits different agents, models and actions are likely to consume.
- Keep track. Watch where credits are going – use the Power Platform admin center to monitor Copilot Credit consumption and understand where your credits are being used.
- Set budgets and limits. Decide what you’re comfortable spending as usage grows.
- Check the value. If something uses more credits, make sure it’s saving you time or effort.
Assessing cost vs value
Once you understand how much each task uses and what that means for cost, the next step is to look at the value Copilot creates. Don’t just focus on the cost of the credits used – consider the time, effort and wider business costs the task could save.
The bottom line
Copilot is no longer just a licence for each person. With Copilot Credits and usage-based billing on the way, it pays to know what you’re using.
The aim isn’t to spend the least. It’s to know what you’re spending, why, and what you get back.
Copilot Credit and Usage-Based Billing FAQs
It’s a way of paying for some Copilot features based on how much you use them, rather than a flat fee per person. It runs on Copilot Credits.
Microsoft now expects this between January and March 2027. The exact date is still to be confirmed.
The planned change is for new Microsoft Copilot Business purchases. Usage-based billing is already available, so if you’d like to use it sooner, you can switch it on yourself.
No. Credits sit alongside your licence and cover the more advanced AI features, such as using an agent. You won’t be paying for every prompt.
It depends on what you use and how often. One credit doesn’t equal one prompt, and a task with several steps uses more credits than a quick question. The best way to get a feel for it is to test and watch your usage.
Yes. Microsoft provides spending controls and budget tools in the Microsoft 365 admin, so you can set limits and keep an eye on usage as it grows.
Speak to our team about managing your usage-based billing!
Our team is happy to talk you through the changes and help you understand the best way to manage Copilot Credits and usage-based billing, based on where your business is with AI today. You can get in contact with us here.