The six levels of Microsoft Copilot, from free chat to agents that do the work
Copilot Chat, the paid seat, Microsoft’s own agents, your own agents, agents that take action, and Cowork: what each level adds, what it costs and when a small business should climb to the next one.
By the Sierrix team ·Published · 9 min read
Ask five people what “Copilot” is and you’ll get five answers. That’s because Microsoft uses the name for a free chat assistant, a paid add-on, a set of ready-made agents, a tool for building your own, and a service that does whole jobs for you. They stack on top of each other, and each level costs more and asks more of you.
The good news for a small business: most of the value is in the first four levels, and the first one is already included in your Microsoft 365 subscription. Here’s the whole ladder, what each rung adds, and how to tell when it’s worth climbing.
Prices and features checked against Microsoft’s documentation on . US prices, before tax. Microsoft renamed its products in August 2026: “Microsoft 365 Copilot” is nowMicrosoft Copilot and “Microsoft 365 Copilot Chat” is now Copilot Chat, so you’ll still see the old names around.
The ladder at a glance
| Level | What it adds | Cost |
|---|---|---|
| 1. Copilot Chat | A secure AI assistant for drafting, summarizing and web research | Included with Microsoft 365 Business plans |
| 2. Paid seat | Copilot that knows your email, meetings and files, inside Outlook, Teams, Word and Excel | $18 per person per month (Copilot Business) |
| 3. Microsoft’s agents | Researcher, Analyst, Facilitator and more, ready to use | Included with the paid seat |
| 4. Your own agents | Assistants that answer from your price list, procedures and past jobs | Included for seat holders; about $0.12 an answer for others |
| 5. Agents and flows that act | Copilot Studio and Power Automate: save records, send documents, follow up | Often $0 with the right design; AI steps billed per use |
| 6. Copilot Cowork | Copilot plans and carries out multi-step jobs for you, on a schedule if you like | Billed per task, on top of the seat |
Level 1 · Free with Microsoft 365
Copilot Chat
Anyone signed in with a work account on Microsoft 365 Business Basic, Standard or Premium already has Copilot Chat, at copilot.cloud.microsoft or in the Microsoft 365 Copilot app. It has enterprise data protection, which means your prompts and files aren’t used to train Microsoft’s models. That alone is a big reason to use it instead of a personal ChatGPT account.
What it’s good at: anything where you bring the material. Paste in rough notes and get a customer letter. Upload a spreadsheet and ask what stands out. Draft a job ad, a policy, a grant narrative or a week of social posts. Research a question on the web with sources.
Where it stops: it can’t search your company files, SharePoint or Teams on its own. The one exception is Copilot Chat in Outlook, which can work with your own inbox and calendar even without a paid seat. Don’t count on Copilot inside Word, Excel or PowerPoint at this level: it depends on the label the app shows.
Climb when: you catch yourself copying and pasting the same emails and files into Copilot every day. That’s the job the next level does for you.
Level 2 · Paid seat
The paid Copilot seat (Copilot Business)
Microsoft Copilot Business is the seat for organizations with up to 300 people: $18 per person per month in the first year with Microsoft’s promotion (for purchases through December 31, 2026), normally $21. It’s an annual commitment (paying monthly on the yearly plan costs $25.20), there’s a one-month free trial, and it adds on to Business Basic, Standard or Premium. Larger companies pay $30for the enterprise seat with the same features.
The seat changes Copilot from a clever writer into an assistant that knows your business:
- It’s grounded in your work. Copilot answers from your email, meetings, calendar, chats, OneDrive and SharePoint, but only what that person is already allowed to see.
- Outlook: “catch me up on what I missed,” thread summaries, replies drafted from past emails, meeting prep.
- Teams: meeting recaps with action items and “what did I miss?” for recorded or transcribed meetings.
- Word, Excel and PowerPoint: draft from your own files, analyze data in plain English, turn a document into a deck. Agent Mode (generally available since April 2026) makes multi-step changes right in the open file.
Who should get one: seats are per person, and the people who get the most back are the ones buried in email, meetings, quotes and documents: usually the owner and the office manager. Start with one to three seats, measure for 60 to 90 days, then decide. Everyone else keeps free Copilot Chat.
Level 3 · Included with the seat
Microsoft’s own agents
An agent is a version of Copilot set up for one kind of job. Microsoft builds and maintains a set of them, and most are included with the paid seat. Always check this list before building anything yourself:
| Agent | What it does | Small-business example |
|---|---|---|
| Researcher | Deep research across your email, files, meetings and the web; writes a cited report (25 questions per person per month) | “What changed in Pennsylvania’s contractor licensing rules this year, and what do we need to do?” |
| Analyst | Works through spreadsheets like a data analyst: trends, statistics, charts | “Which customers haven’t ordered in 90 days?” from a messy sales export |
| Facilitator | Joins Teams meetings, keeps notes and time, tracks action items | Weekly staff or project meetings held in Teams |
| Word, Excel and PowerPoint Agents | Build a whole document, workbook or deck from a prompt and your files | A proposal or a board packet from last quarter’s numbers |
| Planner Agent | Picks up tasks in a shared Planner plan, drafts the work and writes status reports | Teams that already track work in Planner |
Researcher and Analyst appear automatically for seat holders. Most others are turned on by an admin in the Microsoft 365 admin center, or added from the Agent Store in the Copilot app. The Word, Excel and PowerPoint Agents also need an admin to allow Anthropic models in the tenant.
Level 4 · Your knowledge
Your own agents
Microsoft’s agents don’t know your price list, your procedures or how you wrote last year’s estimates. Your own agents do. With Agent Builder (“New agent” in the Copilot app) you give an agent a name, instructions and up to 20 knowledge sources, such as SharePoint folders of past quotes, your employee handbook or your product sheets, and it answers from them. SharePoint agents do the same for one site or library.
Good first agents for a small business: a procedures assistant new hires can ask “how do we handle a warranty call?”, a quote helper grounded in past estimates, and a customer reply assistant that answers in line with your policies.
Cost: no extra charge for people with a paid seat. Staff without a seat can use a shared agent too, but an answer that searches company files costs about $0.12 each, and only after an admin sets up billing. Agents built only on instructions and public websites are free for everyone.
Check permissions first. An agent shows each person only what they can already open. If your SharePoint permissions are loose, an agent will happily surface the payroll folder to anyone who has access to it. Tidy permissions before you connect a folder.
We walk through building one in How to build a Copilot agent for your business.
Level 5 · Doing the work
Agents and flows that take action
Agent Builder agents answer questions; they can’t save a record, fill in a template or send an email. For that you step up to Copilot Studio and Power Automate. This is where the biggest time savings live, because the result is finished work instead of a draft you still have to copy somewhere.
- Power Automate cloud flows run on a schedule or when something happens: a new email, a form, a file in a folder. Flows that use the standard connectors (Outlook, Teams, SharePoint, OneDrive, Excel, Forms, Approvals) are included with Microsoft 365 Business plans at no per-run cost.
- Copilot Studio agents can ask set questions, call those flows and take actions in your systems. A rule-based agent (set questions and buttons, published to Teams) can run without per-use charges. An agent that uses AI to read photos or free-form requests is billed in Copilot Credits at $0.01 per credit, typically cents per conversation.
An example: a contractor photographs a job and types the measurements into Teams. An agent grounded in two years of past estimates suggests crew size, hours and materials against the current price list, a flow fills in the estimate template, saves it to the customer’s folder and emails it for approval, and another flow follows up if the customer hasn’t answered in three days.
Level 6 · Pay per task
Copilot Cowork
Cowork, generally available since June 2026, is Copilot that carries out a multi-step job instead of answering a question. Give it a goal and it plans the steps across Microsoft 365: it reads email and files, creates documents, drafts emails and books meetings, and asks you to approve anything sensitive, like sending. It can run on a schedule, such as a Monday-morning briefing.
It needs a paid seat, and every task is billed in Copilot Credits on top of it. Microsoft doesn’t publish a fixed price per task, but its own examples suggest about $1.35 for a light task like a weekly status update and about$5 for a medium one like preparing for a client meeting. An admin has to switch it on and set a spending limit, so there are no surprise bills. Microsoft says Copilot Business has the same capabilities as its enterprise seat but hasn’t stated outright that it includes Cowork, so confirm in your tenant before you plan around it.
Worth it for: repeated multi-step chores you’d otherwise hand to an assistant. For a one-off question, Researcher or Copilot Chat is cheaper.
How to climb the ladder
- Get everyone using Copilot Chat. It’s free, and the habits carry over to every level. Our guideHow to get real work out of Microsoft Copilot covers the prompts that work.
- Move your files into Microsoft 365. Copilot can’t see Dropbox, Google Drive or a laptop’s desktop. SharePoint and OneDrive are what make levels 2 to 5 work.
- Buy one to three seats for your heaviest email and document users. Use the free trial month to measure.
- Turn on Microsoft’s agents before building your own.
- Build one agent for your most repeated question, grounded in your own documents.
- Automate the hand-offs with Power Automate, so the agent’s answer turns into a sent quote, a saved record or a follow-up.
- Add Cowork last, for specific recurring chores, with a spending cap.
The mistake we see most
Buying a seat for everyone on day one, then finding that half the team uses it as a spell checker. A few seats in the right hands, plus one well-built agent, usually saves more hours than a company-wide rollout.
Sources
- Microsoft Copilot pricing: microsoft.com/microsoft-365-copilot/pricing
- Copilot Business FAQ: learn.microsoft.com/microsoft-365/copilot/copilot-business-faq
- Copilot Chat with and without a license: support.microsoft.com
- Agents built by Microsoft and agent licensing: learn.microsoft.com/copilot/agents
- Copilot Studio billing: learn.microsoft.com/microsoft-copilot-studio/billing-licensing
- Copilot Cowork: learn.microsoft.com/microsoft-365/copilot/cowork