Microsoft 365 Copilot pricing: which Copilot do you actually have?

Copilot Chat comes with Microsoft 365 at no extra cost. Microsoft 365 Copilot (now called Microsoft Copilot, though some licences keep the old name for a while) is the paid licence: it puts Copilot inside Word, Excel, PowerPoint and Teams and works across your firm’s mail, meetings, chats and files. In Australia, Copilot Business, for firms with up to 300 users, currently lists at AU$31.40 per user per month, ex GST, on a yearly commitment. The label under each person’s name on the Microsoft 365 home page shows which one they have.

I spent eight years in channel sales at Microsoft Advertising across Asia Pacific, which became part of Microsoft AI. I used Microsoft 365 and Copilot every day. What stood out was security and privacy: in my view, Copilot is best in class there. Daily use also taught me that getting the full value takes a deeper understanding of how Copilot works. The first thing to understand is which one each person has. Licensing wasn’t my side of the company, so the prices and rules below are Microsoft’s, linked and dated.

Is Copilot free with Microsoft 365?

Copilot Chat is free with Microsoft 365. Microsoft’s Copilot Chat FAQ (updated 19 October 2026) says it’s grounded in the web and “automatically included and available to organizations that have a Microsoft 365 subscription”, and people can upload files to it.

In Outlook it goes further. Microsoft’s overview of Copilot (as at 8 November 2026) says Copilot Chat there “is aware of your open content”, and its Outlook help page says people without a licence can “ask questions about your inbox, calendar, meetings and other limited data”. Chats and wider organisational data come with the paid licence.

Elsewhere, the FAQ says it can’t reach an unlicensed person’s shared or individual work data through Microsoft Graph. Their label shows whether they get Copilot inside Word, Excel, PowerPoint and OneNote.

How do you check which Copilot each person has?

Each person can check their own: sign in to Microsoft 365 with the work account, scroll to the bottom of the home page and read the label under their name (What Copilot license do I have, last updated April 2026). The overview explains the labels:

• Copilot Chat (Basic): no Copilot licence, and no Copilot chat in Word, Excel, PowerPoint or OneNote.
• M365 Copilot (Basic): no Copilot licence, but standard access to Copilot in those apps.
• M365 Copilot (Premium): a Copilot licence, with the full experience and priority access.

You may see (Pro) instead of (Premium); Microsoft uses both for a licensed person. All subscribers have Copilot in Outlook.

An admin sees licences by product under Billing > Licenses and by person under Users > Active users, then Licenses and apps (Microsoft’s licence guide, updated 21 February 2026).

What does a paid Copilot licence add?

A paid licence lets Copilot work across your organisation’s mail, meetings, chats and files, puts it in Teams, Word, Excel and PowerPoint and includes Microsoft’s ready-made Researcher, Analyst and Facilitator, according to its Australian business pricing page (as at 21 October 2026).

Microsoft’s support page comparing Chat with and without a licence (updated 13 October 2026) shows work data going from “Limited (uploaded files)” to “Full (meetings, emails, chats, files, and more)”, and access from “Standard (may be limited during peak times)” to “Priority (faster, more reliable)”. Researcher is capped at 25 queries per user per month (Researcher FAQ, updated 18 August 2026).

How much does Microsoft 365 Copilot cost in Australia?

Copilot Chat costs nothing extra. Paid Copilot starts with the Copilot Business add-on at AU$31.40 per user per month, ex GST, paid yearly, on Microsoft’s Australian pricing page as at 21 October 2026. The bundles include the Business plan itself, and the table also covers the enterprise add-on.

The last column is my starting point for a firm with 5 to 100 staff, not advice.

The AU$26.91 first-year price is for existing customers on an eligible Business plan who buy annually by 31 December 2026, and it isn’t available on trials. Copilot does a lot and has moved fast, so check two things with whoever sells you licences. Microsoft’s licence options page (updated 19 October 2026) calls Copilot Business an annual commitment, while the Australian page also lists a monthly price, so confirm which term you’re signing. And from 1 December, Partner Center says new offers replace the add-on for new purchases, so if you buy in December, get the first-year price confirmed in writing.

Is Copilot Business right for a small business, and does everyone need a Copilot licence?

For a firm with 5 to 100 staff on an eligible Microsoft 365 Business plan, Copilot Business is usually the plan to price first, and only the people who’ll use it need a seat. The licence options page describes it as the add-on for organisations with up to 300 users, with “the same Microsoft Copilot capabilities”.

Everyone without a licence keeps Copilot Chat. I’d license the people doing the one job where Copilot should pay, prove it there and widen from that.

If you’re on Business Standard or Business Premium, ask for the bundle and your plan plus the add-on priced side by side. By my arithmetic, the Business Standard bundle lists at only AU$3.80 a user a month more than the add-on on its own, so ask whether that bundle price is the ongoing one. If you take Microsoft’s one-month free trial, diarise its end: it converts to a paid subscription automatically.

Which AI models do you get, and can Copilot use Claude?

Copilot can use Claude. Microsoft’s page on Anthropic models (updated 18 September 2026) says it switches them on by default for most commercial customers outside the EU, EFTA and UK, which takes in Australia, and an admin can opt out.

Free Copilot Chat gets “standard access” to models such as GPT-5, subject to capacity, per the overview. Model choice in the Copilot app needs a licence, says Microsoft’s support page on Claude in Researcher. The seat includes GPT-5.6 and Claude Sonnet 5 under fair use and Opus with limits (licence and usage-billing guide, updated 6 October 2026). Newer models such as GPT 6 Astra and Claude Fable 5.1 (Cowork model list, updated 14 September 2026) use Copilot Credits on top of the seat, the same guide says, depending on your organisation’s eligibility.

So the model you get depends on your plan, and that’s a watch-out. A while back, before Copilot had Claude, I think that gap is why some people used a personal ChatGPT for certain tasks. Anthropic’s models first reached Microsoft 365 Copilot on 24 September 2025, in Researcher and Copilot Studio, and Claude reached the Copilot Chat model selector in June 2026 (release notes). Check what an unlicensed account can pick before promising Claude to anyone. The catch with the old habit was the personal account, which I’ve covered in whether it’s safe to put client information into AI tools. If you’re also weighing Claude’s own Team plan, I’ve set it against what a Copilot seat already gives you.

What do Copilot agents and Credits cost, and how do you cap them?

Microsoft’s ready-made agents, such as Researcher and Analyst, come with a paid seat. Cowork, Code, Autopilot and the Work IQ APIs bill in Copilot Credits on top, and Microsoft’s licence and billing guide says an admin must set up a billing policy before any of it starts. Microsoft’s pricing announcement of 25 September 2026 says that for enterprise customers, these services stay off until an admin creates a spending policy, “and nothing is billed before that.”

The Australian pricing page lists those four as usage-billed. For staff without a licence, a Copilot agent that reaches SharePoint or Graph connector content is metered and starts switched off, says the Chat FAQ.

Credits cost US$0.01 each on pay-as-you-go, in US dollars and “subject to change” (Copilot Credits licensing guidance), so check the conversion on your invoice. By my arithmetic, Microsoft’s lowest per-user cap, 2,000 credits, is US$20 a person a month.

To cap it, go to Copilot > Cost Management in the Microsoft 365 admin centre (guide to managing usage-based billing, updated 2 October 2026). Microsoft’s setup guide calls a per-user limit optional but recommends it.

From 1 December 2026, Partner Center’s October 2026 announcements say usage-based billing will be on by default for new Copilot Business licences bought through a Cloud Solution Provider, with a default spending limit of 4,000 credits per user per month that admins can adjust. That “will initially not be available in Australia”.

Microsoft introduced Autopilot as Scout on 2 June 2026, noting its own employees had “already been using an early Microsoft Scout desktop experience” before extending it to some customers in private preview and to Frontier organisations. It renamed it on 25 September, and its Copilot product page lists Autopilot as “Available in Private Preview”. No per-task price is published.

The strongest features cost more than the seat, which can put them out of reach for a smaller firm. They can also be where the biggest gains are. Either way, that meter running is a real thing: set the cap before anyone switches them on, and decide first whether AI should act on its own in your firm yet.

Where does your Copilot data sit if you’re in Australia?

If your tenant was provisioned in Australia, Microsoft commits to storing the content of your Copilot and Copilot Chat interactions at rest in Australia (data residency terms, updated 8 October 2026). Processing is another matter: Microsoft’s Copilot privacy page (updated 18 August 2026) says “Customers outside the EU may have their queries processed in the US, EU, or other regions.”

Plan on offshore processing until local processing is live. Microsoft’s in-country processing announcement, updated 3 April 2026, now expects it in Australia “by the end of 2026”, and its roadmap shows it in development for December 2026. Claude and OpenAI-operated models sit outside those in-country commitments for now, per the Anthropic page and Microsoft’s OpenAI subprocessor page (updated 9 October 2026).

The security and privacy I noticed in daily use rest on documented protections. On a work (Entra) sign-in, Copilot Chat carries enterprise data protection, and the Chat FAQ says prompts and responses “aren’t used to train foundation models under enterprise data protection”. The enterprise data protection page says Copilot “inherits your sensitivity labels, applies your retention policies, supports audit of interactions”, and the privacy page says it only surfaces data the person asking can already view. That makes what Copilot can see before a rollout worth checking.

The Chat FAQ also says your data “is not available to OpenAI or used to train OpenAI models”. If clients ask how that fits with OpenAI-operated models being switched on for eligible commercial customers since 24 July 2026, ask your reseller or Microsoft contact, by name and in writing.

What should you settle before your next Copilot renewal?

Settle six things before your next Copilot renewal, in this order.

1. Who has what. Ask everyone to read their label, then check Billing > Licenses.
2. Who needs a seat. License the people doing the job where Copilot should pay first.
3. The cap. Check Copilot > Cost Management for a spending policy. If there’s one, set a per-user limit and decide on Auto-apply new services.
4. Model providers. Claude and OpenAI-operated models are both switched on for most commercial customers, and Microsoft currently excludes both from its in-country processing commitments. That matters once local processing reaches Australia, so decide what suits your clients.
5. Frontier. Microsoft’s early-access program stays off until an admin opts in under Copilot > Settings, and the Frontier guide (updated 15 October 2026) says its features may change or stop, may lack standard support and may cost money.
6. The dates. From 1 December, new offers replace the add-on for new purchases, and resellers stop selling the add-on. Microsoft’s Australian page runs the first-year price to 31 December, so if you buy in December, get it confirmed in writing.

If a reseller manages your licences, my Copilot vs ChatGPT comparison has the three questions I’d send them. Once the licences are settled, Copilot training on your team’s own work is how people get from having it to using it well. Or tell me what your team uses on a discovery call, and I’ll follow up afterwards with what I’d change. If a licence won’t pay for itself, I’ll say so.

FAQ

What’s the difference between Copilot Chat and a paid Copilot licence?

Copilot Chat is free and grounded in the web and uploaded files, and in Outlook it can answer questions about the person’s own inbox, calendar and meetings. A paid licence adds your organisation’s mail, meetings, chats and files, Copilot inside Word, Excel, PowerPoint and Teams and priority access to models.

Do you need a Microsoft 365 plan to buy Copilot?

For now, the Copilot Business add-on needs an eligible Business plan. From 1 December 2026, Microsoft says new Copilot and Copilot Business offers can be bought without a qualifying base subscription, at the same price, and existing add-on customers can keep renewing. Microsoft adds that what Copilot can do still depends on the Microsoft 365 apps and services you’re licensed for.

Do Microsoft’s Australian Copilot prices include GST?

No. Adding 10% by my arithmetic, Copilot Business is AU$34.54 a user a month on the annual price and Business Premium with Copilot is AU$52.69.

Can you turn Claude off in Copilot?

Yes, an admin can opt out of Anthropic’s models in the Microsoft 365 admin centre. Microsoft’s Copilot Credits guidance and its Cowork model page describe the effect on Cowork differently, so test it on one account first.

Is a paid Copilot licence worth it for a small business?

It can be for people whose work runs on your firm’s shared files and Teams meetings, which the licence opens up. Free Copilot Chat already covers the web, uploads and, in Outlook, their own mail and calendar, so try the licence on one job first.

General information only. Current as at October 2026: Copilot’s plans, prices and models change often, and Microsoft Ignite (17-20 November) may change them again. Microsoft, Microsoft 365, Copilot, OpenAI, ChatGPT, Anthropic and Claude are trademarks of their respective owners. Korbai is independent and not affiliated with or endorsed by any of them.