Which Copilot
do you need?
The definitive setup guide for personal and business accounts. Plain English. If you can follow a recipe, you can follow this.
Last updated 24 June 2026
Read this first
Microsoft changed how Copilot is packaged in mid-June 2026. Agents and Notebooks are still there on a basic licence, but what they can do changed. On basic they can only use external knowledge sources, so you cannot point them at your internal SharePoint. That is what has caught people out this month.
This guide gets you unstuck before the session. You are only checking the right things are switched on. You do not need to build anything yet.
Check Copilot Chat works first
Do this before anything else, whichever account you have.
- Open copilot.microsoft.com or the Microsoft 365 Copilot app, and sign in.
- Type a question in the chat box, for example: give me three ideas for a team lunch.
- If you get a sensible answer back, Copilot Chat is working. Now pick your account type below.
You may not have Copilot switched on yet. Choose your account type below and follow that path.
Which kind of account do you have?
There are two kinds and the setup is different for each. Pick yours, and only those steps will show.
Sign in and look at your plan name at portal.office.com/account. If a company name shows up, it is a work account.
What you need
One of these plans: Microsoft 365 Personal, Family, or Premium. They already include Copilot, Agents, and Notebooks. Personal and Family come with 60 AI credits a month, which is plenty for the session; Premium gives the most generous limits.
If you only have the free Copilot, you will need to upgrade to one of the plans above. That is what switches the buttons on.
Check you can create an Agent
An Agent is your own little Copilot helper that you give a job to.
- Open the Copilot app, or go to copilot.microsoft.com, and sign in.
- In the left menu, find Agents. You may need to scroll down a fair way.
- Click Create or Build Agent.
- If a screen opens where you could describe an Agent, you are ready. Do not build one yet; just close it.
Check you can make a Notebook
A Notebook is a project space where Copilot only reads the files you choose.
- In the same app, find Notebooks by clicking the nine dots at the top of the left-hand menu.
- Click New Notebook.
- If a new, empty Notebook opens, you are ready. You do not need to add anything yet.
Make sure you are signed in with your personal account that has the plan, not a work account.
Then check your plan. Agents and Notebooks need Microsoft 365 Personal, Family, or Premium; the free Copilot does not include them. If you are on free Copilot, upgrade at microsoft365.com.
Check which licence you are on
Do not go by whether you can see Agents and Notebooks in the menu. They show up on a basic licence too, so that check will tell you everything is fine when it is not. Look for this instead:
- Open Copilot and look at the first chat screen.
- Find the Work IQ toggle. If it is there, you have the paid licence and you are ready. Stop here.
- If it is missing, you are on a basic licence. Agents and Notebooks will still appear in your menu, but they will not be able to read your internal files.
Notebooks appear on basic too, and the same limitation appears to apply. They may also still show the older OneNote-style interface rather than the new Notebooks UI.
Being on basic is normal and not your fault, and you cannot turn the paid licence on yourself. The simplest setup is the Microsoft 365 Copilot add-on licence. It is one set price each month per person, so there are no surprises on the bill, and it includes everything you need. Ask IT for it: copy the message below and send it to them.
Message to send your IT person
Copy this and paste it into an email or a Teams chat.
Hi, I am on an AI Institute course and need to build Copilot Chat Agents and Copilot Notebooks that can read our internal files. Please could you:
- Assign me the Microsoft 365 Copilot add-on licence. It is a fixed monthly fee and includes Agent Builder, for Agents, and Notebooks.
- Make sure I also have a OneDrive licence, as Notebooks needs it.
- Check my base plan supports the add-on. It sits on top of a qualifying Microsoft 365 plan (Business Standard or Premium, or E3 or E5).
I do not need Microsoft Copilot Cowork, so there is no need to set up usage billing for me. Thank you.
If IT says Agent Builder is blocked by policy, that is the real reason you cannot build Agents. No licence will fix it until they unblock it.
If something still is not working, it is almost always a licence that has not been applied properly, or missing access rights. Both are fixed by your admin, so send them the message above.
The capability matrix at a glance
Each row builds on the one above it. Work out the highest row you need, then read across to your account type.
| Capability | Personal account | Business or work account |
|---|---|---|
| Prompts (Copilot Chat, default model) | Free Microsoft Copilot, web chat. No paid plan.You: nothing to do. | Copilot Chat, free with Business Basic, Standard, Premium, or E3/E5. No add-on.Admin: assign one of those base plans. |
| + Copilot in apps (Word, Excel, Outlook, Teams) | Microsoft 365 Personal, Family, or Premium. Desktop apps: subscription owner only.You: subscribe to one of those plans. | Add-on: Microsoft 365 Copilot Business (SMB, up to 300 seats) or Microsoft 365 Copilot (E3 or E5).Admin: assign the add-on. |
| + Agents and Notebooks on your own files You need this | Microsoft 365 Personal, Family, or Premium. Both included; Notebooks use your OneDrive.You: nothing extra. | The Copilot add-on above, plus Agent Builder enabled and a OneDrive or SharePoint plan with an active site.Admin: enable Agent Builder; confirm OneDrive. |
| + Prompts using the Claude Opus model | Not available. There is no Claude on personal plans. | The Copilot add-on above.Admin: turn on Anthropic (off by default in the EU, EFTA, and UK). |
| + Cowork | Not available. There is no Claude on personal plans. | The Copilot add-on above, plus usage billing (Copilot Credits) switched on.Admin: enable Cowork and usage billing. |
Checked 24 June 2026. Microsoft is changing Copilot pricing and packaging from 1 July 2026, so always confirm current figures before you buy.
Cowork is the Agentic tool that does whole jobs on its own. You do not need it for this course, so it stays switched off. That also keeps the cost down.
Two things worth knowing
On a business account, simple Agents that use only your instructions and public websites are still free on Copilot Chat. It is Agents that read your company files (SharePoint or similar) that need the paid add-on or usage billing.
On a personal plan, Copilot, Agents, and Notebooks are included, but Personal and Family give you 60 AI credits a month, and on Family the AI features work only for the subscription owner. Heavy users may hit that monthly limit; Premium lifts it.