Microsoft 365 Copilot: The Complete 2026 Guide

Microsoft 365 Copilot is an AI assistant built into the Microsoft 365 apps you already use, including Word, Excel, PowerPoint, Outlook and Teams. It uses your own work data (emails, files and meetings) to draft documents, analyse spreadsheets, summarise meetings and write emails. It is a paid add-on to a qualifying Microsoft 365 subscription.

Copilot is the biggest change to the way Australians use Office in a decade, but there is a lot of confusion about what it actually is, what it costs, and whether it is worth paying for. This guide answers all of that in plain English, so you can decide how (and whether) to roll it out.

What is Microsoft 365 Copilot?

Microsoft 365 Copilot is an AI assistant embedded directly inside the Microsoft 365 applications. Instead of switching to a separate website, you work with Copilot from inside Word, Excel, PowerPoint, Outlook and Teams.

What makes it different from a general chatbot is that it is grounded in your work data. With your existing permissions, it can read and reason over your emails, documents, chats, meetings and calendar through the Microsoft Graph. So you can ask it to “summarise the emails from this client this week” or “draft a proposal based on last month’s report,” and it works with your actual content, not generic information.

In short: it is a productivity assistant that lives inside your Office apps and knows your work.

What’s the difference between Microsoft 365 Copilot, Copilot Chat and Windows Copilot?

This is the most common point of confusion, because Microsoft uses the word “Copilot” for several different products.

• Microsoft 365 Copilot (paid). The full version covered in this guide. It is grounded in your organisation’s data and embedded inside Word, Excel, PowerPoint, Outlook and Teams. This is the one businesses pay for per user.
• Microsoft 365 Copilot Chat (free). A web-grounded chat assistant included with many Microsoft 365 plans. It can draft text, brainstorm and answer general questions, but it cannot see your internal files, emails or meetings unless you paste them in. Good for general help, not for working across your own content.
• Windows Copilot / Copilot in Windows. The assistant built into Windows 11 for consumer and system tasks. This is the one many people search for to turn off; it is separate from the work tool.
• Copilot Pro. A consumer subscription that adds AI features to the personal/home versions of the Office apps for individuals, not the business tenant-grounded product.

If your goal is to work faster across your own documents and email at work, the product you want is Microsoft 365 Copilot (the paid, work-grounded version).

How does Microsoft 365 Copilot work?

Copilot combines three things: a large language model (the same family that powers ChatGPT), the Microsoft Graph (your organisation’s emails, files, chats and meetings), and the app you are working in.

When you type a request, Copilot retrieves the relevant content you have permission to see, sends that context to the language model, and returns a result inside the app, a drafted document, a summarised thread, a chart, a set of slides. Crucially, it only ever accesses data the signed-in user already has permission to open, so it respects your existing security boundaries.

What can Copilot do in each Microsoft 365 app?

Copilot in Word. Draft a document from a prompt or an existing file, rewrite and adjust tone, summarise long documents, and answer questions about the content.

Copilot in Excel. Suggest formulas, explain what a formula does, identify trends, create charts, and build PivotTables from a prompt. It works best on data formatted as an Excel table. (A note worth keeping: Copilot is a multiplier for Excel skills, not a replacement. If you know what a correct XLOOKUP or PivotTable should look like, you can direct and check Copilot far more effectively.)

Copilot in PowerPoint. Turn a Word document into a first-draft deck, generate slides from a prompt, apply your template, and summarise an existing presentation.

Copilot in Outlook. Summarise long email threads, draft replies in a chosen tone, and coach your writing before you send.

Copilot in Teams. Summarise meetings in real time, capture action items and decisions, and catch you up on a meeting you joined late or missed, one of the most immediately useful features for most teams.

How much does Microsoft 365 Copilot cost in Australia?

Microsoft 365 Copilot is a paid add-on on top of an existing Microsoft 365 subscription. As of pricing effective 1 July 2026, Microsoft 365 Copilot is around A$44.90 per user per month (billed annually) for the full enterprise version, added to a qualifying Microsoft 365 plan. An earlier promotional rate of roughly A$33 per user per month ended on 30 June 2026.

The free Microsoft 365 Copilot Chat experience is included with many Microsoft 365 plans at no extra cost, but remember it is web-grounded only and cannot work across your internal data.

Pricing changes regularly and depends on your plan and commitment, so confirm the current figure on Microsoft’s official Australian pricing page before you budget.

What licence do you need to use Copilot?

The full Microsoft 365 Copilot add-on requires a qualifying Microsoft 365 base subscription. As of 2026 that includes Microsoft 365 Business Basic, Business Standard, Business Premium, E3 and E5. You add the Copilot licence per user on top of that base plan.

There are lower-cost and free Copilot experiences (Copilot Chat, Copilot in Windows, Copilot Pro for individuals), but they do not include the work-grounded, app-embedded features that make the paid version valuable for business.

How do you get started with Copilot?

Once your organisation assigns you a Microsoft 365 Copilot licence, Copilot appears automatically inside your Office apps, usually as a Copilot button on the ribbon in Word, Excel, PowerPoint and Outlook, and in the side panel in Teams. There is no separate install.

The fastest way to get value is to start with a few high-frequency tasks: summarise a long email thread in Outlook, catch up on a Teams meeting, or draft a first version of a document in Word. Then refine the output with follow-up prompts.

How do you write good Copilot prompts?

A prompt is simply the instruction you give Copilot, and the quality of your prompt largely determines the quality of the result. Most people who are underwhelmed by Copilot are writing vague prompts.

A strong prompt usually includes four things: a clear task (“draft,” “summarise,” “analyse”), the context or source (“using the attached report”), the format you want (“as five bullet points” or “a formal email”), and any tone or audience (“for a non-technical client”). For example: “Summarise this email thread into five bullet points and draft a polite reply confirming the meeting for Thursday.” Specific, sourced, formatted prompts consistently beat one-line requests.

Microsoft Copilot vs ChatGPT: what’s the difference?

Both are built on large language models from OpenAI, but they serve different jobs. ChatGPT is a standalone assistant you open in a separate app or website. Microsoft 365 Copilot is embedded in your Office apps and grounded in your work data, so it can act on your actual documents, emails and meetings.

For general brainstorming and writing, either works. For working faster across your own business content inside the tools you already use, Copilot is the more practical choice.

Is Microsoft 365 Copilot worth it?

For most knowledge workers who live in Outlook, Teams, Word and Excel, Copilot pays for itself if it saves even 20-30 minutes a week, which meeting summaries and email drafting alone often do. The teams that get the least from it are usually those that buy licences and provide no training, so people write weak prompts, get generic output, and give up.

The honest answer: Copilot is worth it when it is paired with a little skill-building. The tool is capable; the returns come from knowing how to direct it.

Is Copilot safe with confidential business data?

Microsoft 365 Copilot runs on Microsoft’s enterprise security and compliance framework. It does not use your organisation’s data to train its AI models, and it can only access data the signed-in user already has permission to open, so it operates inside your existing Microsoft 365 security boundaries. For Australian organisations, Microsoft processes Microsoft 365 data in its Australian data centre regions, subject to your Microsoft agreement.

That said, responsible rollout still matters: reviewing who has access to what, and setting clear expectations with staff about appropriate use, is part of a safe deployment.

How do you learn Microsoft 365 Copilot?

Knowing Copilot exists is very different from using it well. Our hands-on Microsoft 365 Copilot Essentials course is a one-day, instructor-led class ($495 incl GST) that teaches you to use Copilot confidently across Word, Excel, PowerPoint, Outlook and Teams, with dedicated time on prompt writing and responsible use. It runs in Sydney, Melbourne and Online Live across Australia, in small groups led by Microsoft Certified Trainers, and includes free re-sits for 8 months.

Because Copilot multiplies your existing software skills rather than replacing them, it pairs well with foundational Microsoft Excel training for teams that want to get the most from Copilot in Excel.

Frequently asked questions