Copilot vs Cowork: what's the difference?

Copilot is the assistant inside your everyday Microsoft apps: you ask, it answers, and it's covered by the per-person licence. Cowork is the newer agent side of Copilot: you give it a job - build the board pack, research this company, triage the inbox - and it works through the steps with less hand-holding, charged separately by usage in Copilot Credits. Same family, two different ways of paying.

The distinction matters because it decides what you pay for. Ask Copilot in Word to tidy a paragraph and it costs nothing beyond the licence. Ask Cowork to gather last quarter's numbers from three spreadsheets and write the commentary, and it spends credits for every step - reading the files, reasoning through them, producing the document.

Which means the cheapest way to use Cowork is to not use it for things Copilot already does. A deck from one document you hand over is a Copilot job. A deck that needs researching first is a Cowork job. Most teams find the split sorts itself out in the first month, once people see what the /cost command reports.

The names have shifted underneath this: 'Microsoft 365 Copilot' became 'Microsoft Copilot' in August 2026, and Cowork sits inside it. On the bill, the structure is unchanged - licence for Copilot, credits for Cowork.