Short answer
E3 is enough. Microsoft Copilot is an add-on to both Microsoft 365 E3 and E5, and it delivers the same Copilot features on either. E5 adds security, compliance, and analytics tools that can help govern what Copilot reaches, but Copilot does not require them.
What Copilot needs
A Microsoft Copilot license added to a qualifying plan. Qualifying commercial plans include Microsoft 365 E3 and E5, Office 365 E1, E3, and E5, Business plans, and frontline plans such as F1 and F3. Microsoft 365 E7 includes Copilot instead of selling it as an add-on.
What E5 adds next to Copilot
| Capability | E3 | E5 |
|---|---|---|
| Microsoft Copilot add-on | Available | Available |
| Sensitivity labels and basic DLP | Included | Included |
| Auto-labeling, Insider Risk Management, eDiscovery Premium | Add-on | Included |
| Entra ID P2 | Add-on | Included |
| Defender for Endpoint Plan 2 | Add-on | Included |
Scroll the table sideways to see every column.
When E3 plus Copilot is the right call
For most organizations starting with Copilot. Spend the difference on governance work and training: reviewed SharePoint permissions, labels on sensitive content, and people who know how to use what they have.
When E5 is worth it
When you also need automated labeling across large content stores, insider risk monitoring, or advanced eDiscovery, or when consolidating security tools under one agreement saves money elsewhere. Make that decision on security and compliance grounds, not to unlock Copilot.
Based on Microsoft's published documentation as of October 2026. Microsoft changes names, features, and billing often; confirm details in your own tenant.