Work IQ: What Microsoft Means by This Name, What It Costs, and What You Need to Prepare

Work IQ is the name Microsoft uses for the layer that connects Microsoft 365 Copilot and agents to the organization’s work data: emails, meetings and calendars, documents OneDrive and SharePoint, messages Teams, information about people and the organization, Planner plans, and enterprise search results. Microsoft describes it as an intelligence layer that understands the organizational context and enforces existing permissions.

The name covers two distinct uses that must be distinguished. For users with a Microsoft 365 , Work IQ is already integrated into Copilot experiences and agents Microsoft 365 . For an application or agent developed by the organization or by a third-party vendor, the Work IQAPI has been generally available since June 16, 2026, and is billed on a pay-as-you-go basis using Copilot Credits, independent of Copilot licenses.

Included in the Copilot license; billed for custom and third-party agents

Microsoft states that, for users with a Microsoft 365 , Work IQ is available in all Copilot experiences and agents Microsoft 365 . However, whenever a custom agent or third-party agent calls it, the call is billed on a pay-as-you-go basis, just as it is for users without a Copilot license.

The documentation also specifies that access to the Work IQAPI does not depend on Microsoft 365 Copilot. There is one exception in Agent 365: the MCP Work IQ servers it offers—which are still in preview—one per workload such as Mail, Calendar, or Teams, require a Microsoft 365 Copilot license.

What the Work IQAPI Offers Developers

The Work IQAPI offers three ways to access it:

• A2A, so that an agent can delegate a task to Work IQ and retrieve the result;
• MCP, either locally or remotely, so that an AI assistant can use it as a tool, for example in a development environment;
• REST, for an application or service that queries it directly.

The data that Work IQ uses for its analysis comes from Microsoft 365. Business data from Dynamics 365 and Power Platform is integrated through Business Applications in Work IQ, which is still in preview and can be enabled in the Power Platform admin center .

The Work IQ MCP server organizes its operations into ten generic tools: six tools for reading, creating, modifying, or deleting items in Microsoft 365 and trigger actions on them, two tools for querying Copilot and listing available agents, and two tools for discoveringAPI ’s paths and their schemas during execution. A tool such as fetch along the way /me/messages reads the user's emails; do_action on /me/sendMail sends one.

Microsoft is also releasing a command-line interface, Work IQ CLI, which runs in command-line mode or as an MCP server for code assistants such as GitHub Copilot. It requires administrator consent for the Work IQ application in Microsoft Entra. Since general availability on June 16, 2026, preview versions are no longer supported.

Status of Work IQ Features as of October 5, 2026

Articles of Incorporation retrieved on October 5, 2026, from the roadmap Microsoft 365. Entry 559018 is still under development, though its general availability is still scheduled for July 2026.

As of October 5, 2026, several integrations remain in preview, including Work IQ in Microsoft Copilot Studio, Agent 365’s MCP Work IQ servers, and Business Applications in Work IQ for data from Dynamics 365 and Power Platform.

Billing in Copilot Credits and Spending Strategies

API 's Work IQ is one of the pay-as-you-go services billed in Copilot Credits and managed in the Microsoft 365 admin center, along with Cowork, Copilot Managed Runtime, and Teams Phone Agent. Monitoring and limits are configured in Copilot > Cost Management using spending policies. A policy can set a monthly budget for all users and a per-user limit; once the limit is reached, users lose access to the relevant agents and services until credits are reset on the first of the month.

There is one setting to check: the " Auto-apply new services " option is enabled by default in spending policies. An existing policy will then automatically cover new Copilot services as Microsoft adds them. Microsoft recommends reviewing existing policies to determine whether this automatic coverage is appropriate.

In Copilot Studio, Work IQ in preview mode works with the GitHub Copilot harness and uses Copilot Credits; Microsoft asks administrators to create a separate spending policy for this purpose.

Deployment in the tenant

To activate the Work IQAPI , you need three things:

• a pay-as-you-go billing plan configured in Copilot Studio, with a subscription Azure and a resource group;
• a user assigned to this billing plan;
• A Global Administrator account for the installation, which is a one-time process.

This installation creates the primary Work IQ service in the organization, either through Graph Explorer or via Azure CLI. Microsoft notes that it is also created automatically the first time Work IQ is used. However, an administrator configuring the Work IQ MCP policy in the Microsoft 365 admin center before any MCP usage in the tenant may, however, find that the principal service does not yet exist, and the configuration may then fail.

Two settings limit what agents can do. In Copilot Studio, Work IQ remains read-only until an administrator enables write operations in the Microsoft 365 admin center. For MCP servers, the administrator can enable or disable them for the entire organization in the Microsoft 365 admin center ; Microsoft notes that this control may not yet be available in all regions.

Permissions and Data: What Work IQ Adheres To

Work IQ acts on behalf of a user. Each request runs in the context of a specific user and accesses only what that user is authorized to see or do. Microsoft states that Work IQ respects user permissions, security groups, confidentiality labels, and policies DLP already in place. The MCP server uses only four broad permissions OAuth ; a rules engine then evaluates each request based on the resource path, method, user identity, and data content. Every tool call is logged. For Agent 365 MCP servers, logs of calls made by agents can be viewed in Advanced Hunting on the Microsoft Defender portal.

An agent using Work IQ can therefore access anything the user can open, including documents that have been shared too widely. This is the same issue as with Copilot, and the access permissions that should be reviewed before Microsoft 365 Copilot also apply to Work IQ.

With regard to data location, Switzerland is part of the EU Data Boundary, which covers the countries of the European Union and the EFTA. For Microsoft 365, a customer whose country of registration is in the European Union or the EFTA is within the scope, unless they have purchased Multi-Geo Capabilities. Microsoft’s Copilot privacy page states that, for customers in the European Union, Microsoft Copilot is a service within the EU Data Boundary, and that requests from customers located outside the EU may be processed in the United States, the EU, or other regions. The same page excludes Anthropic’s models—offered as a subcontractor in Copilot—from the EU Data Boundary, according to the version accessed on October 5, 2026. Regarding Work IQ, Microsoft states that it is committed to complying with the legal and regulatory requirements of the countries where it operates, including the GDPR and the EU Data Boundary.

Our Reading

For an organization that uses Microsoft 365 Copilot, Work IQ isn’t a purchasing decision—it’s already included in Copilot’s responses. The decision concerns what falls outside that scope, namely in-house agents, third-party vendor agents, and code assistants that query Work IQ. Each one provides new access to Microsoft 365 and a new line of Copilot Credits consumption.

We would address permissions before anything else. Work IQ does not grant any additional rights, but an agent querying it on behalf of each employee can access whatever is left open by overly broad sharing settings. An organization that has already done this work for Copilot has the hardest part behind it; an organization that hasn’t should start there.

Next, we would maintain control over three settings: the “Auto-apply new services” option in existing spending policies, to ensure that a new service isn’t covered without a decision; read-only access to Work IQ in Copilot Studio, which should only be granted for a specific use case; and the list of authorized MCP servers. For a Swiss customer concerned about data localization, we would also verify which models are authorized in Copilot, since Anthropic’s models fall outside the EU Data Boundary, and we would review the Product Terms to determine the exact scope that applies to their tenant, as Copilot’s privacy page only distinguishes between customers within the EU and those outside the EU, without specifying where EFTA customers fall.

An SME without a Copilot license or an agent project doesn’t need to do anything to prepare for Work IQ, other than verifying that no spending strategy automatically covers services it hasn’t selected. To understand where Work IQ fits among other products, the differences between Copilot, Copilot Studio , and Cowork, along with agent governance via Agent 365, provide the context; broader architectural choices are covered in the artificial intelligence section.

What to Check Before Granting Agents Access to Work IQ

• Websites SharePoint, Teams teams, and shared folders that are shared too widely.
• Confidentiality labels and policies DLP in place.
• Existing spending strategies, and the " Auto-apply new services " option for each one.
• The monthly budget and per-user limit for the policy that will cover the Work IQAPI .
• The pay-as-you-go plan at Copilot Studio, your subscription Azure and its resource group.
• The read-only or write status of Work IQ in Copilot Studio.
• MCP servers that are allowed or blocked in the Microsoft 365 admin center.
• Administrator permissions already granted to Work IQ CLI in Microsoft Entra.
• Models permitted in Copilot, with respect to the EU Data Boundary.
• The tenant's location and the potential purchase of Multi-Geo Capabilities.

Microsoft Sources

• Work IQ Overview
• Microsoft Work IQ API
• Work IQ MCP Overview
• Enable Work IQ for your tenant
• Microsoft Work IQ CLI
• Work IQ in Microsoft Copilot Studio
• Work IQ MCP Overview (Agent 365)
• Usage-Based Billing for Copilot Credits
• Manage spending policies for Copilot Credits
• A Closer Look at Work IQ ( Microsoft Copilot blog, March 9, 2026)
• Data, Privacy, and Security for Microsoft Copilot
• What Is the EU Data Boundary?
• Roadmap Microsoft 365, Work IQ entries
• Microsoft Agent 365 Overview
• Business Applications in Work IQ