Copilot Credits are the unit Microsoft now uses to bill most usage-based AI in Microsoft 365. If your organization runs Copilot Studio agents, agent flows, or Copilot Cowork, the invoice is measured in credits. This is a plain-language guide for the person who approves that spend.
What a credit is
A Copilot Credit measures the work an agent or AI feature does: retrieving information, answering a prompt, calling a tool, or running an action. Simple answers use few credits. Multistep work that calls several tools, reads a lot of content, or uses more capable models uses more. Microsoft replaced Copilot Studio “messages” with Copilot Credits on September 1, 2025, without changing pack sizes or the pay-as-you-go rate.
What draws on credits
- Copilot Studio agents and agent flows. Conversations, generative answers, tool calls, and flow actions.
- Copilot Cowork. Generally available since September 2026, Cowork carries out multistep tasks across Microsoft 365. It needs a Microsoft Copilot license and runs on usage-based billing in credits.
- Agents for people without a Copilot license, such as SharePoint agents and Copilot Chat agents grounded in tenant data, where an admin has enabled usage-based billing.
One distinction saves a lot of money. Microsoft states that people with a Microsoft Copilot license who use agents inside Microsoft 365 apps are not charged credits for classic answers, generative answers, or Microsoft Graph grounding. The same agent can cost very different amounts depending on who uses it and where.
Three ways to pay
- Prepaid capacity packs. A fixed number of credits each month, pooled across the tenant. Unused credits do not roll over.
- Pre-purchase plans. A one-year commitment of discounted units drawn down by eligible usage.
- Pay-as-you-go. Usage billed in arrears to an Azure subscription, either alone or to catch overage.
When more than one is set up, prepaid packs are used first, then the pre-purchase plan, then pay-as-you-go. Our Copilot Studio billing answer covers the mechanics in more detail.
What happens when credits run out
With pay-as-you-go connected, usage continues and bills to Azure. Without it, features that depend on credits stop until the next monthly cycle. Neither outcome should be a surprise, and both are avoidable with a forecast and alerts.
Four questions to ask your admins
- Which agents and features in our tenant use credits today, and who uses them?
- Do our heaviest users have Copilot licenses, so their agent use inside Microsoft 365 is covered?
- What is our monthly forecast, and what alert fires before we hit it?
- Is pay-as-you-go connected, and who approved the spending limit?
If nobody can answer the third question, that is the first thing to fix. Microsoft publishes an agent usage estimator, and every agent we build ships with a credit forecast. For the build side of the budget, see what a Copilot Studio agent costs.
Who should learn this
Admins need to read consumption and set limits, which is a full block of our Copilot Studio course. Leaders need to know what they own and what it costs, which is the core of the executive AI briefing.
Written in a personal capacity. Views are the author's own and do not represent any employer. No client or employer systems, data, or configurations are described.