Copilot Business from 1 December: usage-based billing turns on automatically. What to set first

What changes on 1 December

Until now, using the Copilot capabilities billed by usage meant connecting an Azure subscription and setting up a spending policy yourself. From 1 December, Microsoft does it automatically at purchase:

Which purchases: new Copilot Business licenses through CSP, both standalone and in bundles such as Business Premium with Copilot. Adding seats to an existing subscription and converting a trial to a paid license also turn it on.
What gets created in your tenant: an Azure subscription and a default spending policy for all users, capped at 4,000 credits per user per month.
Already set up cost management? If your tenant has a spending policy from any channel or partner, Microsoft doesn’t create a new one, and your existing policy keeps applying. Check that it isn’t open to all users with no cap, because new Copilot Business users fall under it right away.
Haven’t set it up? The purchase creates an Azure subscription and a default policy. If you already have an Azure subscription, ask your partner to bill to it instead of opening a new one.
Israel is included. The change is initially delayed only in a few countries, including Australia, Germany, France and India.

The default policy covers the whole tenant, but it isn’t a charge per user: you pay only when someone actually uses a service that consumes credits. The license itself stays a fixed price per user, and usage-based billing comes on top of it.

Which services consume credits

Service	What it does
Copilot Cowork	Copilot that carries out long tasks on the user’s behalf (Copilot license required)
Advanced work in SharePoint and OneDrive	Copilot agent capabilities inside files and sites (Copilot license required)
Work IQ API	Using your organization’s work data in custom apps and agents (not marked by Microsoft as requiring a Copilot license)
Copilot Managed Runtime	Running apps built with Copilot
Teams Phone Agent	An agent that answers phone calls in Teams
Copilot Code	Copilot coding capabilities, in the Frontier program (Copilot license required)

Microsoft adds services to the list over time. Worth knowing: the Auto-apply new services setting is on by default, so a new service joins the spending policy automatically and starts consuming credits with no further approval.

A spending policy is a cap, not a gift

A spending policy doesn’t give you free credits. It only sets how much may be spent. Everything consumed is billed at the end of the month.
When users reach their cap, they lose access to these services until the 1st of the next month.
If you bought credits in advance (Copilot Credit Pre-Purchase Plan), those are used first, and only then does pay-as-you-go apply.
Once billing is on, it can’t be turned off completely, but you can stop spending: deleting the spending policy stops billing for future usage. Usage that already happened is still billed.

What to set, ideally before you buy

Go to Copilot > Cost management. In the Microsoft 365 admin center. That’s where you manage spending policies and see consumption.
Decide who actually needs these capabilities. Edit the default policy to cover only a security group of the users who need Cowork or agents, or delete it once your group policies exist. When several policies apply, the least restrictive wins.
Set a cap for the policy and for each user. A per-user cap stops one user from using the whole budget. Microsoft requires a minimum of 2,000 credits per user per month when you set a per-user cap.
Decide about new services. If you want to approve each new service before it costs money, turn off Auto-apply new services.
Set up alerts. For admins when the policy nears its cap, and for users when they near theirs.
Give finance read access. Roles such as AI Reader or Global Reader can see consumption without changing settings.
Estimate in advance. With Microsoft’s Copilot Credit Estimator, before you decide on the cap.

A licensing check like this is part of the Microsoft 365 security and license optimization work we do for customers: not just what you buy, but what gets switched on in your tenant and who pays for it.

Buying Copilot Business, or planning to? At OnCloud we’ll set up your spending policy with you before 1 December: who uses it, which capabilities, and how much.