Microsoft Copilot Cowork

How Cowork is billed

Cowork uses Copilot Credits, a shared billing currency that meters AI usage across Copilot services and agents. Copilot Credits are managed through spending policies, monthly spending limits, and optional per-user limits. The number of Credits a task uses depends on factors such as the AI model, tokens processed, connected data and tools, and safety and policy checks.

Choose your billing model

The right billing model depends on your rollout strategy. Most organizations use a combination of prepaid and pay-as-you-go Copilot Credits.

When to use each billing model:

• Prepaid. Best for predictable, ongoing usage once you’ve established a baseline. An annual commitment provides the lowest per-credit cost, and credits can be pooled across Copilot services.
• Pay-as-you-go. Best for pilots, variable workloads, or organizations without usage history. With no commitment, it’s an easy way to get started before committing to prepaid credits.

Configure credit-based billing

Configure credit-based billing in the Microsoft 365 admin center. You’ll create spending policies, assign users or groups, choose a billing method, set budgets and alerts, and review your configuration before activating it.

1. Create a spending policy. Give the policy a descriptive name so it’s easy to identify later.
2. Choose who the policy applies to. Scope it to individual users, security groups, or the entire organization. Security groups work well for managing pilot participants and department-level deployments.
3. Define spending policies and alerts. Set monthly spending limits, spending thresholds, and optional per-user limits to help manage credit consumption.
4. Select the services to include. Choose which Copilot agents and services the policy should cover.
5. Choose a billing method. Use prepaid Copilot Credits, pay-as-you-go through Azure, or both.
6. Review and activate. Confirm your scope, services, budgets, alerts, and billing method before activating the policy.

Plan your budget with cost modeling

Before you configure budgets and spending limits, estimate expected usage to create budgets that reflect real-world usage instead of arbitrary caps. Follow these steps or use the Customer Cowork Estimator to calculate your initial budget:

1. Identify representative users. Select a group of Champions who represent the roles you want to model.
2. Estimate typical usage. Ask each Champion to identify their key Cowork activities, how many times they expect to perform each activity per month, and the average Copilot Credit cost per activity.
3. Calculate expected monthly usage by role. Multiply the average credit cost of each activity by its monthly frequency, then total the results for each role.
4. Set initial budgets. Use these estimates to configure spending policies, monthly spending limits, and alerts in the Cost Management dashboard.

Common cost management scenarios

Here’s how to use Cost Management to address common spending challenges:

1. One user is using the team’s credit pool: Apply a per-user hard cap within the group policy so no single user can drain the shared pool. Review usage by group to identify the highest-consuming users before they reach their limit.
2. A department exceeds its monthly allocation: Use a group-scoped policy with a hard limit for the department’s security group. Monitor group usage so you can identify trends and adjust spending proactively.
3. An agent or service drives higher Copilot Credit usage during routine tasks: Use spending policies to control which users or groups can access specific agents and services, monitor agent and service consumption in the Consumption tab, and adjust spending policy limits or access where appropriate.

Prepare your tenant

Before launching a pilot, ensure that your tenant is ready for Cowork.

• Confirm Microsoft 365 Copilot licenses are assigned to the pilot group.
• Review sharing settings for the pilot group’s SharePoint sites and OneDrive files. Remove or restrict Everyone except external users links on sensitive content.
• Verify that sensitivity labels, data loss prevention (DLP) policies, and retention policies cover the content the pilot group will work with.
• Brief your security and compliance partners on Cowork auditing and the information they can expect to see in Microsoft Purview.

Select your users

Objective: Identify the users who will participate in your pilot.

• Determine which business users are likely to get the most value from Cowork.
• Work with stakeholders and your adoption team to designate the pilot participants.

Enable and deploy

Objective: Make Cowork available to your pilot group with the right controls from day one.

• Make Cowork available to your pilot security group.
• Deploy Cowork to the pilot group so it appears in the Copilot navigation rail without manual installation.
• Pin Cowork in the rail so pilot users see it the first time they open Copilot.

Set budgets and policies

Objective: Configure Copilot Credits, budgets, and spending controls.

• Turn on credit-based billing for Copilot services and agents.
• Choose prepaid Credits, pay-as-you-go, or both based on your organization’s existing billing model.
• Create a spending policy scoped to your pilot security group. For example, set a monthly budget and an alert at the 70% threshold.
• Apply per-user credit limits to protect shared capacity during the learning curve.
• Optional: add IT, finance, and AI leadership to the spending alert distribution list.

Communicate and scale

Objective: Use early results to inform broader deployment.

• Share pilot outcomes with leadership, including task volume, time saved, and examples of work completed with Cowork.
• Expand Cowork access to the next security group, then repeat the budget-and-monitor cycle.
• Send periodic pulse surveys to check in with users throughout the pilot.

Monitor usage and collect feedback

Objective: Monitor usage patterns, catch problems early, and build a repeatable governance rhythm.

• Add the Cost Management dashboard in the admin center to your weekly IT operations review.
• Refine budgets based on observed patterns. Lift per-user limits if they’re limiting productivity without meaningfully reducing spend.
• Identify users approaching their cap so you can help them avoid interruptions.
• Pull a monthly snapshot of usage by user and by group for your AI lead and CFO.
• Audit a sample of Cowork actions in Microsoft Purview so the security team can verify policies are working as intended.
• Define an escalation path for users who reach their spending limit mid-task, including how they can request a limit increase and how admins will review credit requests or adjust spending policy limits.

What you can monitor today

Cost Management in the admin center gives you credit-usage visibility from day one, including:

• Overall usage — total Credit usage over time against your budget.
• Usage by user — per-user usage against limits so you can identify high-consumption users early.
• Usage by group — group-level usage against group budgets.
• Usage by agent and service — credit usage for each agent and service.

Pair the Cost Management dashboard with the Microsoft Purview audit log to review Cowork actions alongside other activity in your Microsoft 365 environment.

Perform service health reviews

Service health reviews (SHRs) bring the implementation team and business stakeholders together to review insights from AI transformation projects. During these check-ins, assess usage patterns, challenges, and success stories using data from the Copilot dashboard. Refine your deployment and adoption plans based on those insights.