Microsoft Copilot Chat vs Microsoft 365 Copilot (2026)
Quick answer
Start with Microsoft Copilot Chat: Microsoft lists it at no additional cost with eligible Microsoft 365 plans, and it covers web research, writing, rewriting, uploaded files and images. Buy the Microsoft 365 Copilot license when you want Copilot to work across your own emails, meetings, chats and documents through Microsoft's work data layer, with Copilot inside Teams and the Microsoft 365 apps and priority access. The Business add-on is listed at $21.00 per user a month paid yearly, or $25.20 paid monthly.
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This page is for office managers and owners on Microsoft 365 who keep hearing "Copilot" and want to know what is free and what costs extra. Prices are as listed on Microsoft's own pages as of October 2026. Microsoft also shows a promotional $18.00 price for existing customers with an eligible Business plan. A free Stepthrough lesson for Copilot is coming; for now, the prompting skill carries over, so practice with the free Prompt Writing 101 lesson.
How do they compare at a glance?
| Microsoft Copilot Chat | Microsoft 365 Copilot | |
|---|---|---|
| Price and free tier | At no additional cost with eligible Microsoft 365 plans. Subject to service capacity limits | Business add-on: $21.00 per user a month paid yearly, or $25.20 paid monthly. Promotional $18.00 for the first year for existing customers with an eligible Business plan, July 1 to December 31, 2026. Needs a qualifying Microsoft 365 plan; the Business offer is for up to 300 users |
| Best for | Web research, drafting, rewriting and questions about files you give it | People whose answers live in their own mail, meetings, chats and documents |
| File handling | You can upload files and analyze documents, and attach supported files from the menu | Reasons across the files, sites, emails, meetings and chats you have permission to access, plus uploads |
| Privacy and data controls | Enterprise data protection for eligible work and school accounts. Respects existing Microsoft 365 permissions | The same permission model and enterprise data protection, with broader access to organizational content through Work IQ. Admins can control web grounding |
| Integrations | Copilot Chat app, Outlook, Teams and Edge. In Outlook it can answer across your inbox, calendar, meetings and chats | Copilot in Teams and Microsoft 365 apps such as Word, Excel and PowerPoint, plus agents such as Researcher, Analyst and Facilitator |
| Free Stepthrough lesson | Coming | Coming |
What is the difference between Copilot Chat and Microsoft 365 Copilot?
Copilot Chat is the baseline chat assistant that comes with eligible Microsoft 365 plans. Microsoft says it is primarily grounded in web data, and you can also give it organizational content by pasting text, uploading files, referencing supported files or using agents with access to that content. Microsoft 365 Copilot is the paid license that adds broader grounding across your own Microsoft 365 content, and Copilot inside Teams and the Microsoft 365 apps.
In Outlook, Copilot Chat gets extra grounding even without the license: Microsoft says users can ask across supported content such as emails, calendar items, meetings and chats. Microsoft describes that as a limited set of content compared with the licensed experience.
How much does Microsoft 365 Copilot cost?
Microsoft lists the Microsoft 365 Copilot Business add-on at $21.00 per user a month paid yearly, or $25.20 per user a month paid monthly. It shows a promotional $18.00 price on the yearly plan for the first year, for existing Microsoft 365 customers with an eligible Business plan, between July 1, 2026 and December 31, 2026. A separate qualifying Microsoft 365 license is required, and the Business offer is for up to 300 users. Enterprise prices are on a separate Microsoft page.
Prices differ by country, plan and billing period, so confirm on Microsoft's Copilot pricing page before you decide. For all the assistants side by side, see ChatGPT vs Claude vs Gemini vs Copilot.
Do I need the paid license, or is Copilot Chat enough?
Copilot Chat is enough if your main jobs are drafting, rewriting, research with sources from the web, and questions about a file you hand it. It is also the right place to start while you find out how your team actually uses AI, because it costs nothing extra on an eligible plan.
The paid license starts to earn its price when people spend real time hunting through their own mail, meetings and documents, such as an account manager who needs a summary of everything on a client across Outlook, Teams and shared files. It also adds Copilot in Teams and the Microsoft 365 apps and priority access to Copilot capabilities. Try a few real tasks in Copilot Chat first and note where it falls short.
Is it safe to use Copilot Chat with company information?
Microsoft says Copilot Chat includes enterprise data protection for eligible work and school accounts, and that both Copilot Chat and Microsoft 365 Copilot respect your existing Microsoft 365 permissions, retention policies and sensitivity labels. That means it only shows content a person can already open. The same care applies as with any AI tool: use your work account rather than a personal one, and check your company's rules on what to paste. The glossary entry on enterprise data protection explains the term.
How does Copilot compare with ChatGPT and Gemini at work?
Copilot is the natural fit for offices on Outlook, Word, Excel and Teams, and Gemini is its counterpart in Google Workspace. ChatGPT and Claude are separate apps that work with any email system. For two-way comparisons, see Copilot vs ChatGPT for work and Copilot vs Gemini for work email.
Who is each one for?
Pick Microsoft Copilot Chat if
You are on an eligible Microsoft 365 plan, want a safe place to draft, rewrite and research without paying more, and want to learn what your team really uses AI for first. The skills in the free Prompt Writing 101 lesson apply directly.
Pick Microsoft 365 Copilot if
People spend hours searching their own mail, meetings and documents, or you want Copilot inside Teams, Word, Excel and PowerPoint with priority access. Pilot it with a few people and measure the time saved before you buy for everyone. A free Stepthrough lesson for Copilot is coming.
Which of these tools have a free Stepthrough lesson?
- Microsoft Copilot Chat: a free Stepthrough lesson is coming.
- Microsoft 365 Copilot: a free Stepthrough lesson is coming.
Practice it free, step by step
Prompt Writing 101: Role, Context, Task, Format. Ask ChatGPT for the same customer email twice, once vaguely and once with a four-part prompt, and see exactly why structure gets a better answer. You do every step yourself in a practice copy of ChatGPT, it checks your work as you go, and “Do it for me” finishes any step you get stuck on. Free, and nothing touches your real accounts.
Start the free lessonKey takeaways
- Microsoft lists Copilot Chat at no additional cost with eligible Microsoft 365 plans, so try it before paying for a license.
- As of October 2026, the Microsoft 365 Copilot Business add-on is listed at $21.00 per user a month paid yearly, with a promotional $18.00 first-year price for eligible existing customers.
- The license adds broader grounding across your own emails, meetings, chats and documents, plus Copilot in Teams and the Microsoft 365 apps.
- Both respect your existing Microsoft 365 permissions and include enterprise data protection for eligible work accounts.
Frequently asked questions
Is Microsoft Copilot Chat free?
Microsoft lists Copilot Chat as available at no additional cost with eligible Microsoft 365 plans. It is subject to service capacity, so priority access is one of the things the paid license adds.
Do I need Microsoft 365 to buy Microsoft 365 Copilot?
Yes. Microsoft says a separate license for a qualifying Microsoft 365 plan is required to purchase Microsoft 365 Copilot.
Can Copilot Chat read my email?
In Outlook, Microsoft says Copilot Chat can answer questions across supported content such as emails, calendar items, meetings and chats for eligible users, without the paid license. Outside Outlook it is primarily web grounded, and you give it work content by pasting or uploading it.
Which Microsoft 365 apps does the paid license add Copilot to?
Microsoft lists Copilot in Teams and Microsoft 365 apps with the license, and says Copilot Chat (Basic) does not include chat in Word, Excel, PowerPoint and OneNote. Check the in-app label in your own apps, since it depends on your licensing and tenant.
Where do these prices and features come from?
Every price and feature on this page was checked against the vendor's own page, as of October 2026. No numbers here are estimates or third-party figures. The example businesses in the Stepthrough lessons are made up.
