Microsoft 365 Message Center item MC1435850
MC1435850 - Updates to Cost Management in Microsoft 365 Admin Center
Microsoft 365 Admin Center's Cost Management updates improve spending alert reliability, policy selection for users in multiple policies, overage handling, and clarify Copilot Credits availability. Admins must recreate spending alerts, review policy assignments, check limits, and reconcile capacity pack usage. Rollout starts July 22, 2026.
- Message Center ID
- MC1435850
- Category
- plan For Change
- Severity
- normal
- Services
- Microsoft 365 Copilot Chat
- Tags
- Admin impact
- Published
- 2026-07-22
- Last updated
- 2026-07-22
- Expires
- 2026-10-26
[What and why:]Following the initial release of Cost Management, we are delivering a set of enhancements and bug fixes designed to improve reliability, predictability, and overall administrator experience. These enterprise-ready updates help organizations better manage spend across usage-based services such as Cowork and Work IQ APIs:Increased reliability of spending alert emailsUpdated spending policy selection logic for users in multiple policiesImproved overage handling for per-user and group spending limitsClarified Copilot Credits availability from capacity packs across admin centers[Rollout schedule:]We will begin rolling out these updates starting July 22, 2026, and expect to complete by end of July.[Impact on your organization:]Increased reliability of spending alert emails Who is affected: Admins receiving spending limit alerts. Platforms and services: Microsoft 365 Admin Center > Copilot > Cost ManagementWhat will happen: We identified an issue that could cause spending-alert thresholds not to be saved reliably or to reset after entry. As part of this update, existing spending-alert values will be cleared and cannot be restored. Admins must recreate alerts on every spending policy where alerts are required. Spending limits, per-user limits, and other policy settings will remain in effect.Updated spending policy selection logic for users in multiple policiesWho is affected: Users in multiple spending policies. Platforms and services: Microsoft 365 Admin Center > Copilot > Cost ManagementWhat will happen:When a user is in more than one policy for the same service, the system will assign the user a policy following this order:(1) highest per-user limit (2) if tied, the largest overall policy limit(3) if still tied, the most recently created policy. If a policy doesn't have a per-user limit set, its overall limit is used as the per-user value for this comparison.The chosen policy applies in full — its billing setup and limits — and settings from other policies aren't combined.Once the user hits the limit, they stay on that policy and aren't moved to another one. These updates will enable more consistent policy assignment for users in multiple policies.Improved overage handling for per-user and group spending limitsWho is affected: Users in a group spending policy that exceed their per-user spending limit.Platforms and services: Microsoft 365 Admin Center > Copilot > Cost ManagementWhat will happen:If a user is still within their per-user limit when a task starts, that task is allowed to finish — even if it pushes the user past their user limit during execution. This avoids disrupting work already in progress, but it could result in a per-user overage (i.e., credits consumed beyond the per-user limit).Starting July 22, 2026, at Microsoft's sole discretion, per-user overages will no longer draw against the shared pool at the policy level, helping preserve capacity for the rest of the group. These overages are not billed and therefore will not show up as credits consumed in the cost management dashboards. This change applies going forward only — prior billed usage will not be reclassified. Any per-user overage incurred before July 22 remains billable to the customer, up to the associated spending policy's configured monthly limit.Clarified capacity pack availability across admin centersWho is affected: Admins who manage Copilot Credits purchased through capacity packsWhat will happen: Several updates are rolling out to make available Copilot Credit capacity from capacity packs easier to understand in Cost Management. (1) In the Overview tab, the Prepaid capacity pack credits used tile will not show the total number of Copilot Credits purchased via capacity packs, only the amount used. (2) A tooltip will also be added to this tile to direct admins to review capacity allocation and usage in other admin centers. (3) Finally, on the Billing Method page when setting up a spending policy, the number of credits available from capacity packs will now reflect credits actually available for use, rather than the total number of credits purchased. Any capacity pre-allocated in Power Platform Admin Center — for example, to environments or agents — will be excluded from the available amount shown.Context: Copilot Credits from capacity packs can be consumed by multiple services managed by both Microsoft 365 Admin Center and Power Platform Admin Center. Capacity that is assigned or used in Power Platform Admin Center (e.g., allocated to specific environments or consumed by agents) reduces the prepaid capacity available for Cowork and Work IQ API services managed by Microsoft 365 Admin Center. [Action Required/Recommendations:]REQUIRED - Re-create your spending alerts. Because prior alert values will be cleared and can't be restored, go into each spending policy where you rely on alerts and set the alert threshold again. Confirm the value is saved after you enter it. Only spending alerts are affected — your spending limits and per-user limits remain in place.Review users assigned to multiple spending policies for the same service. Check where users overlap across policies and confirm the resulting policy assignment matches your intent. Re-check group and per-user limit configurations. No action is required for the overage handling change to take effect, but it's a good time to confirm that per-user limits and group spending limits on each policy reflect the guardrails you want going forward.Reconcile capacity pack usage across admin centers. Because Copilot Credits from capacity packs can be consumed in both Microsoft 365 Admin Center and Power Platform Admin Center, check Power Platform Admin Center to see how much prepaid capacity is already allocated to environments or agents. Additional informationUsage-Based Billing and Cost Management for Copilot Credits | Microsoft LearnManaging AI experiences enabled by usage-based billing | Microsoft LearnDiscovery setting for AI experiences enabled by usage-based billing | Microsoft Learn