Microsoft 365 Licensing in 2026: Two Things, One Name
Both called "Copilot." Very different price tags. M365 base pricing expected to rise in 2026. Here's what's real, what's optional, and what to watch out for in proposals.
Before you even factor in anything Copilot-specific, baseline pricing across Microsoft 365 E3, E5 and Business Premium is expected to continue rising over the next licensing cycles. That's the floor moving upward.
First, What Is Copilot?
- Copilot Chat (already included for most users) — This is a secure AI chat assistant inside the Microsoft environment, similar to ChatGPT or Claude, that can help draft text, summarise information and answer questions. It's useful, but it is not the full Copilot experience.
- Microsoft 365 Copilot (paid add-on) — The capabilities most organisations have in mind — AI analysing Excel data, generating PowerPoint presentations, rewriting Word documents, summarising Teams meetings — come from Microsoft 365 Copilot. That is currently an add-on of roughly €30 per user per month, on top of your existing subscription.
Importantly, you don't need this for every employee. For reporting and decision-support scenarios, you're licensing the people who interrogate and act on data, not the whole organisation.
What You're Already Paying For
Your existing Microsoft 365 licence already provides a powerful foundation: SharePoint, Teams, Power Automate, and the collaboration layer many organisations use for reporting and operational data. You can build significant capability on top of that without buying anything new.
If You're Building Agents, the Cost Model Changes
Once you move beyond the standard Copilot add-on and start building custom agents — through Copilot Studio, or connecting to operational data via Microsoft Fabric — the pricing structure shifts from a predictable per-seat licence to consumption-based billing. Copilot Studio agents are billed per message. That's manageable at pilot scale, but needs careful modelling before you scale across an organisation.