Teams transcription licence requirements: which Microsoft plan you need

The short version

Which Microsoft 365 plans include transcription

Microsoft does not sell transcription as a separate feature. Its admin documentation treats it as a policy setting in Teams, and its Teams Premium comparison table does not list standard transcription as a Premium feature. So the working rule is: if your plan includes Teams and your admin allows it, you can transcribe.

Microsoft's help page for recording says the organiser and the person recording each need one of these: Office 365 Enterprise E1, E3, E5, F3, A1, A3, A5, M365 Business, Business Premium or Business Essentials. That page still uses some older plan names. For Teams Phone, Microsoft lists Microsoft 365 Business Basic, Business Standard and Business Premium as qualifying Teams subscriptions for small business, alongside Teams Essentials.

For a small Australian firm that usually means one of these:

• Microsoft 365 Business Basic, Business Standard or Business Premium. These include Teams. Transcription is available subject to policy.
• Microsoft 365 or Office 365 E3 or E5. Fine if your subscription includes Teams. See the note on "no Teams" suites below.
• Microsoft 365 Apps for business. This is the Office apps only. It is not a Teams plan.
• Teams Essentials. A standalone Teams plan for small business. Microsoft lists it as a qualifying Teams subscription for Teams Phone, but we could not confirm on Microsoft's own pages that transcription is included, so check with your reseller before relying on it.

What needs Teams Premium or Copilot

Transcription gives you the words. The add-ons are for what Microsoft does with the words.

Teams Premium is an add-on. Microsoft says it does not replace a Teams licence, so a user needs both. Microsoft also says that as of 1 April 2026 some features that used to need Teams Premium are included with Teams Enterprise. Its announcement describes those as town hall and webinar features, and says intelligent recap stays in Teams Premium. Its comparison table still lists AI-generated notes and translated transcripts under Teams Premium. So that change does not move anything on this page.

Two Copilot details catch people out:

• The default Copilot policy requires a saved transcript. Microsoft's default for the meeting policy is "On with saved transcript required", which means Copilot only works once someone starts transcription, and organisers cannot change that per meeting.
• Turning Copilot off turns transcription off. If an organiser sets Copilot to Off in meeting options, Microsoft says nobody can record or transcribe that meeting. This only comes up where your admin has picked a Copilot policy that lets organisers change the option. Under the default they cannot.

Whether you need Microsoft's AI notes at all is a separate question. We compare them with the alternatives in our guide to AI note takers for Teams.

Phone calls: Teams Phone and the calling policy

Meetings and calls are licensed and controlled separately, and this is where most firms get stuck.

A scheduled meeting, a Meet now and a group call are all covered by the meeting policy. A one-to-one call is covered by the calling policy, whether it is to another Teams user or to an ordinary phone number. Microsoft says call transcription is off by default. Your admin turns it on under Voice > Calling policies > Transcription, or with the `-AllowTranscriptionForCalling` parameter in PowerShell.

Teams Phone is the add-on that makes Teams a phone system. To call outside numbers you also need a connection to the phone network. Microsoft lists three main options: a Microsoft Calling Plan, where Microsoft is the carrier, Operator Connect, where a participating carrier provides it, and Direct Routing through your own equipment. Microsoft sells Teams Phone with a Calling Plan as a bundle where Calling Plans are available.

Microsoft recommends keeping the meeting and calling policies aligned. Otherwise staff find that transcription works in a meeting and is missing on a call, and assume something is broken.

If your client calls run through a separate phone system, the licence question is different again. We cover Aircall and Dialpad separately.

The admin policies that must be on

When someone has the right licence and still cannot transcribe, work through this list. It is in the order we would check it.

1. Meeting policy: Transcription is On. Teams admin centre, Meetings > Meeting policies, pick the policy, set Transcription to On. In PowerShell: `Set-CsTeamsMeetingPolicy -Identity Global -AllowTranscription $true`. Microsoft says this is on by default for new policies.
2. It is on for both people. Microsoft describes transcription as a per-organiser and per-user setting. The meeting organiser must have it, and so must the person who clicks Start. If the organiser is on a custom policy with it off, nobody in that meeting can transcribe.
3. Copilot is not set to Off for the meeting. Off disables recording and transcription for that meeting.
4. Who can record and transcribe is not set to "No one". Organisers with Teams Premium or Copilot can restrict this in meeting options.
5. The person is in the organiser's organisation and signed in. Guests, people from another organisation and anonymous participants cannot start transcription.
6. Calling policy: Transcription is On, if you want calls. Teams admin centre, Voice > Calling policies. In PowerShell: `Set-CsTeamsCallingPolicy -Identity Global -AllowTranscriptionForCalling $true`.
7. Wait. Microsoft notes that a policy change can take time to take effect.

There is also a diagnostic. Microsoft provides a Teams transcripts test in the Microsoft 365 admin centre: your admin enters the user's email address and the meeting link, and it reports which requirement is not met.

Settings worth deciding on purpose

• Recordings and transcripts automatically expire. On by default at 120 days. Your admin can change the number of days or turn it off. Microsoft describes it as a way to manage storage, so do not treat it as your record-keeping policy.
• Require participant agreement for recording and transcription. Off by default. When on, Microsoft says participants' audio, video and content sharing stay off until they agree to be included.
• Record and transcribe automatically. A meeting option that is off by default for meetings. It records as well as transcribes. Forcing it on for every meeting needs a Teams Premium meeting template.
• Transcript API access. In Meetings > Meeting settings. Microsoft ships Microsoft Graph access switched off. It only matters if you want an app outside Teams to read transcripts.

A worked example: a five-person brokerage

A fictional example. A mortgage brokerage has five staff on Microsoft 365 Business Standard. They hold client meetings in Teams and want a written record of each one without keeping audio.

• Licence: nothing to buy. Business Standard includes Teams.
• Policy: the admin confirms Transcription is On in the Global meeting policy. It was, because that is the default.
• In the meeting: the broker who sent the invite tells the client, then selects More actions > Record and transcribe > Start transcription. Nothing is recorded.
• Afterwards: the transcript is in that broker's OneDrive and on the Recap tab, ready to download as .vtt or .docx.
• What they do not get: AI notes. There is no Teams Premium or Copilot licence, so the Recap tab shows the transcript and no summary.
• Phone calls: not covered. They use mobiles for calls. Transcribing those in Teams would mean buying Teams Phone with a calling plan and turning on the calling policy.

The steps for the meeting itself are in Teams transcription without recording. Consent rules differ by state, so read our guide on whether it is legal to record calls in Australia before you transcribe client conversations.

What a file note tool adds, and what it needs

The brokerage above has transcripts but no file notes. They have three choices: write the note by hand from the transcript, buy Copilot or Teams Premium for Microsoft's AI notes, or use a tool that turns the transcript into a note in their own format.

CallNote is the third kind. It needs no Microsoft add-on licence. It works from the transcript that standard Teams already produces, and it never joins the meeting or receives audio. What it does need on the Microsoft side:

• Transcription allowed and switched on in the meeting, as above.
• Transcript API access turned on once by your Teams admin, with Include speaker attribution on so the note knows who said what.
• Each person to connect their own Microsoft account in CallNote. The first person may need the firm's Microsoft 365 admin to approve the app.

After that, the draft note is waiting when a meeting you organised ends. You review it and publish it to the one CRM your firm has connected (HubSpot, Clio or Microsoft Dynamics 365), or export a PDF. If the admin switch is not an option at your firm, you can still download the .vtt and upload it by hand. CallNote costs $149 a month for one person or $99 per seat per month for a team, in Australian dollars, and we offer a free 10-minute setup call for the Teams connection. The workflow is in how to turn a Teams transcript into a file note, and the CRM end is in Teams meeting notes to Dynamics 365.

Checklist before you buy anything

• Does everyone's licence include Teams, or is it a "no Teams" suite?
• Is Transcription On in the meeting policy that applies to your organisers?
• Do you need calls transcribed? If so, is that Teams Phone, or a different phone system altogether?
• Do you want Microsoft's AI notes, or just the transcript? Only the first needs Teams Premium or Copilot.
• Does any meeting have Copilot set to Off? That blocks transcription.
• How long do transcripts last before they expire, and where does the permanent record go?
• Will an outside app read the transcripts? If so, turn on Transcript API access.

Common questions