Short answer
Copilot Studio bills in Copilot Credits. Organizations buy prepaid capacity packs of 25,000 credits a month, pay as they go through an Azure subscription, or commit to a pre-purchase plan. Prepaid credits are used first, then the pre-purchase plan, then pay-as-you-go.
Three ways to pay
- Prepaid capacity packs. 25,000 Copilot Credits a month per pack, renewed each billing period. Admins allocate them to environments in the Power Platform admin center.
- Pay-as-you-go. Usage bills in arrears to a connected Azure subscription. It can stand alone or catch overage when prepaid credits run out.
- Pre-purchase plan. Discounted commit units for a year, drawn down by eligible usage. Useful when consumption is predictable.
When more than one is set up, Microsoft applies prepaid packs first, then the pre-purchase plan, then pay-as-you-go.
What uses credits
Agent conversations, generative answers, tool calls, and agent flow actions in Copilot Studio, plus usage-based features elsewhere, such as Copilot Chat agents grounded in tenant data and SharePoint agents for unlicensed users. Microsoft Copilot license holders using agents in Microsoft 365 are covered for many scenarios. More complex, multistep work uses more credits.
What happens when credits run out
If pay-as-you-go is connected, usage continues and bills to Azure. If not, credit-dependent features stop until credits renew. For agent flows, new runs are blocked while the agent keeps answering questions that do not need a flow.
Keeping it predictable
- Forecast credits from expected conversations before launch.
- Allocate capacity per environment rather than leaving it pooled.
- Set capacity notifications and budgets in the admin centers.
- Review the Copilot cost management dashboard monthly.
In government clouds
Copilot Studio is available in GCC and GCC High under the same licensing as commercial. Microsoft documents pay-as-you-go setup for commercial tenants, and government billing options differ, so most government tenants plan capacity in advance with prepaid packs. Confirm what your cloud supports before you budget around pay-as-you-go.
Copilot Cowork uses the same credits
Copilot Cowork, generally available since September 2026, carries out multistep tasks in Microsoft 365 on a user's behalf. It needs a Microsoft Copilot license and draws Copilot Credits through usage-based billing that an admin sets up in the Microsoft 365 admin center under Copilot, Cost management. Credits from capacity packs can cover Cowork as well as Copilot Studio, so one budget conversation covers both.
Based on Microsoft's published documentation as of October 2026. Microsoft changes names, features, and billing often; confirm details in your own tenant.