If your business uses Microsoft 365 Copilot, the way Microsoft bills for it is changing, and you need to know before December 1. Microsoft writes the rules for Copilot billing, whoever your Microsoft partner is, and it has changed them. Until now, a Copilot seat came with fair use and no set usage limits. Now there are limits, and the advanced work is metered on top. PK Tech is a Microsoft partner, so this applies to our clients too.
The short answer
From December 1, 2026, Copilot Business bought through a Microsoft partner comes with a usage meter switched on. The seat price holds and still covers everyday Copilot, within Microsoft's new usage limits. Advanced work such as Copilot Cowork is billed per use in Copilot Credits, up to 4,000 credits per person a month by default, per Microsoft's October 2026 partner announcement. Decide who should use Cowork, and what the business will spend, before adding seats.
From December 1, a new Copilot Business purchase comes with usage-based billing already on, billed pay-as-you-go. The announcement applies it to Copilot Business bought on its own and in bundles, such as Microsoft 365 Business Standard with Copilot and Business Premium with Copilot.
Until now, turning on usage-based services took several manual setup steps. Microsoft's guide to the change says the purchase now creates an Azure subscription to bill the usage against, plus a spending policy that covers your whole Microsoft 365 tenant. Microsoft estimates that about three in four businesses buying Copilot Business this way have no Azure set up through their partner today, so for many small businesses this adds a kind of billing they have not had before.
Existing customers can trigger it too. The same guide says adding Copilot Business seats, or converting a Copilot trial to a paid license, also turns usage-based billing on for the tenant. Microsoft marks that guide as describing changes that have not shipped yet, so details may still move before December 1.
United States businesses are in the first wave. At launch the change will not be available in Australia, Belgium, Brazil, France, Germany, India, Italy, Korea, the Netherlands, Poland or Spain.
The seat still covers the Copilot your staff use every day. Microsoft's post on its Copilot pricing calls this "everyday AI" under the per-user license: drafting an email, summarizing a document, turning a meeting transcript into notes. That seat has always come with fair use, and Microsoft is now setting usage limits on it. A user who reaches one gets a warning first, then a choice: switch to the Auto model setting at no extra cost, or move to credits.
Credits pay for work a user hands off. For Copilot Business, the announcement names Copilot Cowork, Work IQ APIs and GitHub Copilot Harness. Microsoft's Copilot Credits overview also lists advanced work in SharePoint and OneDrive and Teams Phone Agent, and says more services will be added.
Per the Cowork overview, Cowork sends emails, schedules meetings, creates documents and posts in Teams, and the user approves each action before it happens. Model responses, tool calls and browser tasks all count toward usage, and a higher effort setting uses more credits.
Microsoft Learn does not publish a per-credit price. Ask your Microsoft partner for the rate before anyone in the business starts using Cowork.
Before December 1
A spending policy is also the switch that lets someone use Cowork
Microsoft's Cowork access page is plain about it: a policy that includes Cowork lets everyone it covers use it, however small the limit. Even a one-credit limit grants access. To keep a person away from Cowork, no policy that includes it can cover them.
The default policy
What the default allows in a 15-person business
| Setting | Default | What it means for your business |
|---|---|---|
| Who is covered | Everyone in the tenant | Anyone covered can run up charges |
| Limit per user | 4,000 credits a month | 15 users with Copilot: up to 60,000 a month |
| Limit for the business | 1,200,000 credits a month | Higher than 15 users can reach; the per-user limit stops them first |
| New services | Added automatically | A service Microsoft adds later can spend with no decision |
| Two policies, one person | The least-restrictive one wins | A tighter policy does not cancel a looser one |
| At the limit | Access stops until the 1st | Checked asynchronously: a task or two can start past it |
Sources: Microsoft's guide to the change, spending policy guide and Cowork access page.
Usage is billed separately from the seat. Per Microsoft's guide to the change, Copilot usage is billed like Azure usage, apart from the Copilot Business seat, so expect a usage charge that changes month to month beside a seat cost that does not.
You can see the usage yourself. The Cost management dashboard in the Microsoft 365 admin center (Copilot > Cost management) breaks it down by user, group, service and policy. Per the Copilot Credits overview, a reader role can see those reports without being able to change anything, so an office manager or controller can review spend without holding admin rights.
Turning it off is limited. Microsoft's guide says usage-based billing cannot be fully switched off once it is set up. Deleting the spending policy stops billing for future usage, and the business still owes what was used before.
These are decisions for the business. Your Microsoft partner can make the settings with you, and for PK Tech clients that means us:
Two other October changes reach small businesses:
Will our existing Copilot Business seats start billing for usage on December 1? Not by themselves. Microsoft applies the default to new purchases, but its guide says adding seats or converting a Copilot trial to paid also turns usage-based billing on for the whole business. Talk to your Microsoft partner before any Copilot license change after December 1. Even once it is on, nothing is charged until someone covered by the policy uses a credit-based service such as Cowork.
Can we turn usage-based billing off completely? Microsoft's guide says it cannot be fully switched off once set up. Deleting the spending policy stops billing for future usage, though the business still owes what was used before. The more practical control is who the policy covers: leave someone out of every policy that includes Cowork and they cannot use it, whatever the limit. Microsoft marks that guide as describing changes that have not shipped yet.
Does everyday Copilot in Word, Excel and Outlook use credits? No, everyday Copilot work stays inside the per-user seat. Microsoft's own pricing post describes drafting, summarizing and similar tasks as "everyday AI" covered by the license. Credits are for services that run longer or act for a user, which Microsoft lists for Copilot Business as Copilot Cowork, Work IQ APIs and GitHub Copilot Harness, with more to come. The heaviest users can still reach fair-use limits on the seat.
Talk it through
Set your Copilot spending policy before December 1
PK Tech has been a managed IT provider for more than 17 years, and holds AICPA SOC 2 Type II attestation from an independent audit. Bring your headcount and the people you want using Cowork to the call.
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