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Microsoft's usage-based billing model charges customers based on actual usage, measured in Copilot Credits. This model complements fixed subscription licensing with a flexible payment option aligned to actual usage.
In some scenarios, licenses act as an entry point enabling access to AI services billed on a pay-as-you-go basis.
Understand Copilot Credits
Copilot Credits are a common currency for eligible Microsoft services with usage-based billing. For more information on licensing details about Copilot Credits and services, see Copilot Credits Guide.
This document covers usage-based billing for Cowork and Work IQ API in the Microsoft 365 admin center. Microsoft will add more agents and services over time, and continues to provide notifications and update supported content as they become available.
For more information, see:
Estimate Cowork usage: Use the Customer Cowork Estimator to model potential credit usage for your organization.
Manage usage-based billing in the Microsoft 365 admin center
Use the cost management dashboard
The Microsoft 365 admin center's Cost Management dashboard is a centralized place to manage and optimize spending on AI experiences enabled by usage-based billing - through centralized controls, flexible billing setup, and deep visibility into usage. Administrators allocate Copilot Credits, apply policy-based access and limits, and operate across prepaid and pay-as-you-go models. Reporting, insights, budgets, alerts, and hard caps provide the safeguards needed to track consumption, understand cost drivers, and prevent overspending. The Cost management dashboard enables administrators to control, monitor, and optimize spending of Copilot Credits.
Note
While Microsoft brings more agents and services to this experience, you can manage other pay-as-you-go services in Billing > Pay-as-you-go. For more information, see Pay-as-you-go in the Billing node.
Setup and configuration
You can easily set up and govern how AI experiences based on usage-based billing are enabled and controlled across your organization.
The Configuration experience gives you a centralized place to enable usage-based billing and define how spending is managed:
Enable usage-based billing with flexible options, including prepaid credits (P3), pay-as-you-go, or existing capacity
Connect to Azure subscriptions to support billing at scale
Define spending policies to control who can consume, how much they can use, and where spending of Copilot Credits is allocated
Set limits to prevent overuse and align spending of Copilot credits with organizational budgets
Manage credit capacity by purchasing prepaid credits or using existing allocations
This feature gives organizations a clear path to enabling new AI experiences while maintaining control over cost and access.
To learn more about how to set up, see Managing AI experiences enabled by usage-based billing.
Monitor spending of Copilot Credits
You can get clear visibility into how and where Copilot is used, and how to optimize it.
The Overview tab provides a real-time snapshot of usage and spending of Copilot Credits:
Track overall credit consumption and remaining capacity.
Identify emerging trends and potential risks early.
Understand where usage is increasing across services and users.
This feature helps administrators quickly answer: "Where are we spending, and are we on track?"
The Consumption tab enables detailed analysis of usage patterns:
Drill into usage by user, group, service, or agent.
Identify high-intensity users and cost drivers.
Analyze consumption trends and patterns over time.
Inform policy adjustments and smarter budget allocation.
This feature allows organizations to understand, monitor, and optimize spending of Copilot Credits.
To learn more about how you can monitor where Copilot is used, and how to optimize it, see Managing AI experiences enabled by usage-based billing.
Next steps
To learn more about setup, configuration, and monitoring, see Managing AI experiences enabled by usage-based billing.
To learn more about discovery settings for AI experiences enabled by usage-based billing, see Discovery setting for AI experiences enabled by usage-based billing.