12.2 Copilot License Types

Microsoft’s July 22, 2026 AB-731 skills list asks candidates to Understand Copilot license types, including pay-as-you-go, monthly, and included with Microsoft 365 subscription. Exam items care about those three buckets, not a viral “thirty dollars a user” rumor. This section follows Microsoft Learn’s licensing article and the Copilot PAYG overview. List prices change by product, customer agreement, and country; unless you are reading Microsoft’s current commercial price list for your tenant, stay at the model level.

A practical CFO conversation sounds like this: “Do we get any Copilot because we already pay for Microsoft 365? Who needs a monthly add-on seat? When should we attach an Azure subscription instead of buying seats for every frontline worker?” Those three questions map one-to-one to Microsoft’s three named types.

The three types Microsoft asks you to name

Microsoft’s agents admin guide describes the same mix as three deployment options: Copilot Chat with no usage billing, Copilot Chat with usage billing, and licensed Microsoft Copilot. If an exam stem says “monthly,” map it to the per-user Microsoft Copilot add-on, not to an Azure invoice that fluctuates every night.

Included: web-grounded Copilot Chat at no extra seat cost

Microsoft Learn’s License Options for Microsoft Copilot article is explicit: Copilot Chat is an AI prompt-and-response experience automatically included for organizations with an eligible Microsoft 365 subscription. Two Copilot Chat options exist:

• Web-based chat: results from the internet; included at no extra cost.
• Work-based chat: results the Entra work or school account can access; available with a Microsoft Copilot license.

The Copilot Chat FAQ restates the included experience: Copilot Chat is web-grounded and included for organizations that have a Microsoft 365 subscription. Users sign in with Entra. For those Entra users, Microsoft documents enterprise data protection (EDP) under the DPA and Product Terms without a required extra admin enablement step. Prompts and responses under EDP can be logged for audit and eDiscovery; they are not used to train foundation models.

What included Chat does not do, unless you add a license or a meter: Copilot Chat cannot access Microsoft Graph tenant data, individual work data, or Graph-connector data if the user has no Microsoft 365 Copilot license. Users may still upload files into Chat (stored in the user’s OneDrive for Business). Declarative agents grounded only in instructions and public websites are documented as available at no additional cost, subject to store and agent policies. Agents that reach SharePoint or Graph connector content are metered, off by default, and need admin setup (Learn points at a Copilot Studio subscription / PAYG path).

Eligible base plans for adding Microsoft Copilot are listed on the same licensing page (Business Basic/Standard/Premium, Apps, many Microsoft 365 and Office 365 enterprise and frontline plans, selected Teams, Exchange, SharePoint, OneDrive, Planner, Visio, and Clipchamp plans, plus government and education families). You do not need to memorize every SKU for AB-731, but you must know the add-on requires a qualifying Microsoft 365 (or listed) plan. Education offerings exist for faculty, staff, and students aged 13 and older. Customers whose Education or Business subscriptions omit Teams can still purchase Copilot licenses, per that article.

Monthly: the per-user Microsoft Copilot add-on

Monthly on the exam is the commercial pattern of assigning a Microsoft Copilot (Microsoft 365 Copilot) license to a user, typically as an add-on billed per user per month under your Microsoft 365 agreement. Learn tells admins to assign those licenses in the Microsoft 365 admin center and to use the Copilot License Details diagnostic to confirm a user can actually open Copilot features.

What the monthly seat is for:

• Work-based chat grounded in Microsoft Graph content the user can access.
• Copilot inside Microsoft 365 apps such as Word, Excel, Outlook, and Teams, plus the Chat capabilities.
• Custom agents and broader extensibility when the organization chooses to build or deploy them.
• Researcher and Analyst, which Microsoft documents as Microsoft-installed agents for Copilot-licensed users. The agents admin guide states that purchasing a Microsoft Copilot license gives the organization access to additional capabilities such as Researcher and Analyst. Researcher FAQ states Researcher is part of the core default experience for Microsoft Copilot licensed users; admins can block Researcher and Analyst. Researcher is for multi-step research across web and work content (files, email, meetings, chats the user can access), with citations. Microsoft currently documents a maximum of 25 Researcher queries per user per month. Analyst is the better fit for Microsoft Excel-heavy analysis, per the same FAQ. Users cannot unpin Researcher themselves.
• Copilot Studio usage for classic answers, generative answers, or Microsoft Graph tenant grounding inside Microsoft 365, Teams, or SharePoint is documented as zero-rated against Copilot Studio packs/meters for users who have a Microsoft 365 Copilot license.
• Microsoft’s Copilot Studio licensing article also lists SharePoint Advanced Management among capabilities included with a Microsoft 365 Copilot license, which matters because SAM is a primary oversharing tool from section 12.1.

Naming note from Microsoft’s privacy article: Microsoft 365 Copilot is being referred to as Microsoft Copilot, and Microsoft 365 Copilot Chat as Microsoft Copilot Chat, with a transition period where both names appear. On AB-731, if the stem says Microsoft 365 Copilot, treat it as the paid work-grounded add-on unless the stem clearly means included Chat.

Do not recite a single official worldwide US dollar price for this add-on. Microsoft’s licensing page points to Copilot pricing and plans rather than embedding a global list price in the skills article. Exam writers care that you pick monthly per-user versus included Chat versus Azure PAYG.

Pay-as-you-go: Azure billing policy, not a second “seat SKU”

The Microsoft Copilot pay-as-you-go overview applies to Microsoft Copilot Chat, SharePoint agents, and Microsoft Copilot Retrieval API (Preview). It is usage-based billing so organizations can use selected Copilot capabilities without committing to a full license for every person. Learn’s documented use cases are exactly a transformation-leader story:

• Establish usage patterns before deciding whether prepaid licenses make financial sense.
• Scale with demand and pay for usage.

Setup is two steps: (1) add a billing policy that points at an Azure subscription and a set of users, optionally with a budget and email alerts at percentage milestones; (2) connect that policy to a Copilot service. Creating the policy alone does not finish billing. Deleting a policy disconnects connected services. Admins connect or disconnect one policy at a time. Before connecting a user-specific policy, disconnect an existing “all users” policy. After disconnect, those users lose the metered agents for that service.

Roles that can view and manage PAYG in the Microsoft 365 admin center: Global administrator, Billing administrator, AI administrator, and Global reader (read-only). Microsoft repeats least-privilege guidance: do not make extra Global Administrators just to watch a meter.

New PAYG features arrive via Message center; they are disabled by default until a Global Administrator or subscription owner enables them. Charges flow through the Azure meter for that service. Monitor in Microsoft 365 admin center Cost Management and in the Azure portal.

Copilot Studio pay-as-you-go is not the same list as the Copilot Chat/SharePoint/Retrieval overview, but Microsoft’s PAYG overview explicitly says: “For information about Copilot Studio pay-as-you-go billing, see Copilot Studio pay-as-you-go.” Current Copilot Studio licensing docs describe PAYG as paying through an Azure subscription for Copilot Credits actually used, linking environments with a billing policy in Power Platform admin center. That is in-scope as a related meter for AB-731, not as a fourth mystery SKU. Prepaid Copilot Credit packs and a one-year Copilot Credits prepurchase plan also exist; unused Copilot Credits do not carry over month to month on the standard prepaid path.

SharePoint agents require either PAYG for SharePoint or a Microsoft 365 Copilot license, per the agents admin guide. Agent Builder similarly needs a Copilot license or a tenant with Copilot Studio PAYG enabled.

How a leader chooses among the three

• Frontline or occasional users who may only need web Chat: included Copilot Chat, with agent store governance so they do not silently enable metered tenant-data agents.
• Knowledge workers who live in Outlook, Teams, and documents, plus Researcher/Analyst: monthly per-user Microsoft Copilot on a qualifying plan.
• A pilot, a departmental agent, or uncertain seat count: PAYG with a budget, then convert heavy users to monthly seats if the pattern supports it.

HR should not assume included Chat can summarize the HR site. Legal should not assume PAYG work grounding is “off” unless they verify no billing policy is connected. Finance should not assume a blog price is the Microsoft figure the exam wants.