Microsoft Copilot licences for business: which one you need and what it costs

Microsoft has renamed it, cut the price for smaller businesses, bundled it into two of its plans and put a promotion on it that ends in December. If you looked at a Microsoft Copilot licence a year ago and decided it was too expensive or too confusing, the picture has changed. If you looked at it last month, some of the names have changed since then.

This guide is for a business with up to 300 staff on Microsoft 365 that wants a straight answer: which Microsoft Copilot licence do we need, who should have it, what does it cost, and what should we do before switching it on. Prices are from Microsoft’s UK pricing page as at 24 October 2026, per user per month, excluding VAT. Check them before you sign, because they move.

One naming note. In October 2026 Microsoft stated that “Microsoft 365 Copilot is now named Microsoft Copilot”, and the free chat tool is now Microsoft Copilot Chat. You will see both names for a while. Same products.

First, the one you already have

Every Microsoft 365 business plan includes Copilot Chat at no extra charge. It is the chat box in the Microsoft 365 app and in Teams. It works from the public web and from whatever you paste into it, under your business’s Microsoft terms rather than someone’s personal account.

What it does not do is read your own email, files, calendar and meetings. That is the whole difference between the free tier and a paid Microsoft Copilot licence. If your team mostly wants a safer alternative to a personal ChatGPT account for drafting and summarising, start here and spend nothing. Many businesses should stop at this paragraph for six months.

The three paid routes and what they cost

For organisations with up to 300 users, Microsoft sells a paid Microsoft Copilot licence three ways:

The small print that matters:

• The promotion. The £13.80 add-on price applies to new annual subscriptions taken between 1 July and 31 December 2026, for the first year only. After that it returns to the standard price.
• The cap. Microsoft’s licensing documentation says Copilot Business “supports up to 300 licensed users per tenant”, a tenant being your organisation’s Microsoft 365 account. Over 300 and you are into enterprise licensing, which costs more.
• Eligible base plans for the add-on: Business Premium, Business Standard, Business Basic, Microsoft 365 Apps for Business and Teams Essentials. If you are on one of those, you qualify.
• Auto-renewal. All of these renew automatically. An annual commitment means a wrong guess costs a year, not a month.
• Usage billing on top. Custom agents and some of the newer features (Microsoft names Cowork and Autopilot) are billed by usage, not covered by the licence. Nobody should be able to switch those on without someone who sees the bill agreeing first.
• Everything else is included. All three routes give you Copilot in Word, Excel, PowerPoint, Outlook and Teams, plus Microsoft’s pre-built agents such as Researcher and Analyst.

Which Microsoft Copilot licence is right for which business

The add-on and the bundles are the same Copilot. The question is simply how many people need it and what base licence you already pay for.

A few people need it. Buy Copilot Business as an add-on for those people only. This is the most common answer for a 20 to 100 person business: the MD, the people who write proposals, the operations manager drowning in Teams meetings.

Everyone needs it and you are on Business Standard. Compare the add-on on top of your current licence against moving to Business Standard with Copilot. Do the sum on your actual headcount, because the bundle is priced to tempt you and the add-on promotion only lasts a year.

You are weighing up Business Premium anyway. Business Premium is the plan with the security tooling: device management, the better email protection, the data protection labels. If you were going to move to it for those reasons, Business Premium with Copilot is the tidy way to do both. Just do not buy Premium for Copilot alone; buy it for the security and treat Copilot as the passenger.

More than 300 staff. You are an enterprise customer in Microsoft’s eyes and the Business options are not available to you. Different conversation.

Who should actually get a licence

Not everyone. The value of a Microsoft Copilot licence concentrates in people who live in Outlook, Teams and Office files all day, because that is what the paid version can read and the free one cannot. The people who get the most from it are the ones who:

• attend meetings they need minutes from,
• write documents from scratch regularly,
• deal with long email threads they need to catch up on,
• build or maintain spreadsheets.

Someone whose real work happens in the specialist software your business runs on, a care-planning tool or a till, will get far less, because Copilot cannot see into those systems unless someone connects them.

Our advice is the boring kind. Run everyone on the free Copilot Chat for a month. Watch who uses it and asks for more. Licence those people, review after a quarter, and expand from evidence rather than from the sales deck.

Do this before you switch it on

A paid Microsoft Copilot licence reads what the user can read. Microsoft’s own documentation says Copilot “only surfaces organizational data to which individual users have at least view permissions” and tells you, in the same paragraph, to make sure your SharePoint permissions are right.

Here is the thing most IT providers will not tell you about that sentence. It describes the problem, not the solution. We see the same pattern in most of the Microsoft 365 estates we take on: a folder shared with “Everyone” years ago, a leaver’s OneDrive full of client files, salary spreadsheets in a Teams channel the whole company belongs to. Nobody noticed because nobody went looking. Copilot goes looking for whoever asks it a question. Before the first licence is assigned:

1. Review sharing across SharePoint, Teams and OneDrive. Who can see what, and should they? Close the “Everyone” links. Deal with leavers’ data.
2. Label your sensitive files. Copilot honours Microsoft’s sensitivity labels and encryption, so the HR folder and the board papers can be fenced off properly rather than by hoping nobody looks.
3. Decide the model and data settings. Microsoft confirms that prompts, responses and your data are not used to train its AI models, and that for EU customers Copilot sits inside the EU Data Boundary, Microsoft’s commitment to keep European customers’ data processing within Europe. Microsoft also offers third-party models inside Copilot and lets administrators decide whether to use them; at the time of writing its documentation notes that the Anthropic-provided models are excluded from that EU boundary. Someone should make that decision deliberately.
4. Tell staff the rule about accuracy. Microsoft says Copilot’s output is “not guaranteed to be 100% factual”. A summary is a starting point. Anything that goes to a client, a regulator or a bank gets read by a human first.
5. Check who can switch on usage-billed features. The licence is a fixed cost. Agents are not.

Where Cyber Kaizen fits

We are a Microsoft Partner and we licence, set up and look after Microsoft 365 for businesses across Hertfordshire, London and the home counties. The part of a Copilot rollout we care about most is step one above, because a licence that exposes your salary spreadsheet to the whole company is not a productivity tool.

If you want to know whether a Microsoft Copilot licence is worth it for your team, and what it would see on day one, book a free IT health check. We will show you the permissions picture, do the licence maths on your real headcount, and tell you honestly if the free tier is all you need.

For the full picture of how we licence, lock down and roll out Copilot, see Microsoft Copilot for small business. If the question is wider than Copilot, start with AI for small business.

Related services: Microsoft 365 Cloud Services, Cloud Migration, Microsoft 365 Backup.