Microsoft Copilot Cowork – How to configure Cost Management

Following the announcement of General Availability of Copilot Cowork on June 16^th Microsoft also announced the new licensing model for Cowork.

Copilot Cowork licensing is now consumption-based: an M365 Copilot license is required, and usage of Copilot Cowork is billed separately based on consumption.

Usage is measured in Copilot Credits, and different Copilot Cowork tasks consume different numbers of credits. Microsoft provides examples of common task types along with estimated credit usage for each.

Cost control

To enable usage-based billing for Copilot Cowork you will need an Azure subscription and to enable at least one spending policy in the Admin Center.

In the Microsoft 365 Admin Center there is now a new section under Copilot for Cost management, her you can add spending policies.

Click the Get started button to create your first spending policy:

Here you can select your billing method, Copilot Credits will be billed to the subscription you select here.

Next is to set the monthly spending limit, you can choose “Don’t limit monthly spending” which allows the policy to use the organizations available credits. We might not want to do that 😊

If you select “Limit monthly spending” you can set a Copilot credit limit per month for this policy.

In addition, you can set a monthly spending limit pr. User. For example, if you set the monthly budget for this policy to 10.000 credits (that will be used up quickly 😊 ), and the user limit to 1.000 credits, no individual user will be able to use more then 1.000 credits and would have to wait to use Cowork again until the 1^st of next month.

The last section on this page lets you set alerts to send out weekly email summaries when specific credit limits are reached. You can send alerts to individual users or shared mailboxes.

By clicking the Customize setup configuration you can further customize the spending policy:

Here you get an overview of your policy, you can change the name, you can select what groups the policy should apply for. The ability to apply it for specific users is coming soon.

You can configure what services this policy applies to. For now, you can select Copilot Cowork and Work IQ API. And you can include all future services.

When you are happy with your configuration you can hit the Activate button to make the spending policy active.

After the policy is activated, you can continue to create more targeted policies for departments or projects or however you would like to structure the policies.

If a user has more than one policy applied to them, the most targeted policy is the one that enforces its limits. So, if the user is part of an All Users policy with a spending limit of 10.000 credits and a more targeted policy for example for the Sales department, based on a Entra ID security group, and that policy has a spending limit of 200.000 credits, that’s the policy that will apply to the user.

Individual user limits within the policy still applies, if the individual user budget limit is set to 20.000 credits pr. month , the user will have 20.000 credits to spend each month.