diff --git a/apps/web/pages/api/twilio/webhook.ts b/apps/web/pages/api/twilio/webhook.ts
index cc15930abf..825525c2d3 100644
--- a/apps/web/pages/api/twilio/webhook.ts
+++ b/apps/web/pages/api/twilio/webhook.ts
@@ -76,7 +76,7 @@ async function handler(req: NextApiRequest, res: NextApiResponse) {
   const creditService = new CreditService();
 
   if (countryCode === "US" || countryCode === "CA") {
-    // SMS to US and CA are free
+    // SMS to US and CA are free for teams
     let teamIdToCharge = parsedTeamId;
 
     if (!teamIdToCharge && parsedUserId) {
@@ -92,15 +92,16 @@ async function handler(req: NextApiRequest, res: NextApiResponse) {
       teamIdToCharge = teamMembership?.teamId;
     }
 
-    await creditService.chargeCredits({
-      teamId: teamIdToCharge,
-      userId: !teamIdToCharge ? parsedUserId : undefined,
-      bookingUid: parsedBookingUid,
-      smsSid,
-      credits: 0,
-    });
+    if (teamIdToCharge) {
+      await creditService.chargeCredits({
+        teamId: teamIdToCharge,
+        bookingUid: parsedBookingUid,
+        smsSid,
+        credits: 0,
+      });
 
-    return res.status(200).send(`SMS to US and CA are free. Credits set to 0`);
+      return res.status(200).send(`SMS to US and CA are free for teams. Credits set to 0`);
+    }
   }
 
   let orgId;
diff --git a/packages/features/ee/workflows/components/WorkflowStepContainer.tsx b/packages/features/ee/workflows/components/WorkflowStepContainer.tsx
index 064cfe7fc6..4967b99cc0 100644
--- a/packages/features/ee/workflows/components/WorkflowStepContainer.tsx
+++ b/packages/features/ee/workflows/components/WorkflowStepContainer.tsx
@@ -814,7 +814,13 @@ export default function WorkflowStepContainer(props: WorkflowStepProps) {
                         }}
                         defaultValue={selectedTemplate}
                         value={selectedTemplate}
-                        options={templateOptions}
+                        options={templateOptions.map((option) => ({
+                          label: option.label,
+                          value: option.value,
+                          needsTeamsUpgrade:
+                            option.needsTeamsUpgrade &&
+                            !isSMSAction(form.getValues(`steps.${step.stepNumber - 1}.action`)),
+                        }))}
                         isOptionDisabled={(option: {
                           label: string;
                           value: any;
@@ -860,9 +866,8 @@ export default function WorkflowStepContainer(props: WorkflowStepProps) {
                       )}
                   </div>
                 )}
-
                 <div className="mb-2 flex items-center pb-1">
-                  <Label className="mb-0 flex-none ">
+                  <Label className="mb-0 flex-none">
                     {isEmailSubjectNeeded ? t("email_body") : t("text_message")}
                   </Label>
                 </div>
@@ -880,7 +885,11 @@ export default function WorkflowStepContainer(props: WorkflowStepProps) {
                   updateTemplate={updateTemplate}
                   firstRender={firstRender}
                   setFirstRender={setFirstRender}
-                  editable={!props.readOnly && !isWhatsappAction(step.action) && hasActiveTeamPlan}
+                  editable={
+                    !props.readOnly &&
+                    !isWhatsappAction(step.action) &&
+                    (hasActiveTeamPlan || isSMSAction(step.action))
+                  }
                   excludedToolbarItems={
                     !isSMSAction(step.action) ? [] : ["blockType", "bold", "italic", "link"]
                   }
diff --git a/packages/features/ee/workflows/lib/test/twilioWebhook.test.ts b/packages/features/ee/workflows/lib/test/twilioWebhook.test.ts
new file mode 100644
index 0000000000..6f8945094f
--- /dev/null
+++ b/packages/features/ee/workflows/lib/test/twilioWebhook.test.ts
@@ -0,0 +1,161 @@
+import { describe, beforeEach, vi, test, expect } from "vitest";
+
+vi.mock("@calcom/lib/constants", async () => {
+  const actual = await vi.importActual<typeof import("@calcom/lib/constants")>("@calcom/lib/constants");
+  return {
+    ...actual,
+    IS_SMS_CREDITS_ENABLED: true,
+  };
+});
+
+vi.mock("../reminders/providers/twilioProvider", () => ({
+  validateWebhookRequest: vi.fn().mockResolvedValue(true),
+  getCountryCodeForNumber: vi.fn().mockResolvedValue("US"),
+}));
+
+const mockChargeCredits = vi.fn().mockResolvedValue({ teamId: 1 });
+vi.mock("@calcom/features/ee/billing/credit-service", () => ({
+  CreditService: vi.fn().mockImplementation(() => ({
+    chargeCredits: mockChargeCredits,
+    calculateCreditsFromPrice: vi.fn().mockReturnValue(1),
+  })),
+}));
+
+const mockFindFirst = vi.fn();
+vi.mock("@calcom/prisma", () => ({
+  default: {
+    membership: {
+      findFirst: mockFindFirst,
+    },
+    team: {
+      findUnique: vi.fn().mockResolvedValue(null),
+    },
+  },
+}));
+
+describe("Twilio Webhook Handler", () => {
+  beforeEach(() => {
+    vi.clearAllMocks();
+  });
+
+  describe("SMS to US and CA numbers", () => {
+    test("should create expense log with 0 credits with a given teamId", async () => {
+      const webhookHandler = (await import("../../../../../../apps/web/pages/api/twilio/webhook")).default;
+
+      const mockRequest = {
+        method: "POST",
+        headers: {
+          "x-twilio-signature": "valid-signature",
+        },
+        query: {
+          teamId: "1",
+        },
+        body: {
+          MessageStatus: "delivered",
+          To: "+1234567890", // US number
+          SmsSid: "SM123",
+        },
+      };
+
+      const mockResponse = {
+        status: vi.fn().mockReturnThis(),
+        json: vi.fn().mockReturnThis(),
+        send: vi.fn(),
+      };
+
+      await webhookHandler(mockRequest, mockResponse);
+
+      expect(mockResponse.status).toHaveBeenCalledWith(200);
+      expect(mockResponse.send).toHaveBeenCalledWith("SMS to US and CA are free for teams. Credits set to 0");
+      expect(mockChargeCredits).toHaveBeenCalledWith({
+        teamId: 1,
+        bookingUid: undefined,
+        smsSid: "SM123",
+        credits: 0,
+      });
+    });
+
+    test("should create expense log with 0 credits if userId is part of a team", async () => {
+      mockFindFirst.mockResolvedValue({ teamId: 1 });
+      const webhookHandler = (await import("../../../../../../apps/web/pages/api/twilio/webhook")).default;
+
+      const mockRequest = {
+        method: "POST",
+        headers: {
+          "x-twilio-signature": "valid-signature",
+        },
+        query: {
+          userId: "123",
+        },
+        body: {
+          MessageStatus: "delivered",
+          To: "+1234567890", // US number
+          SmsSid: "SM123",
+        },
+      };
+
+      const mockResponse = {
+        status: vi.fn().mockReturnThis(),
+        json: vi.fn().mockReturnThis(),
+        send: vi.fn(),
+      };
+
+      await webhookHandler(mockRequest, mockResponse);
+
+      expect(mockResponse.status).toHaveBeenCalledWith(200);
+      expect(mockResponse.send).toHaveBeenCalledWith("SMS to US and CA are free for teams. Credits set to 0");
+      expect(mockChargeCredits).toHaveBeenCalledWith({
+        teamId: 1,
+        bookingUid: undefined,
+        smsSid: "SM123",
+        credits: 0,
+      });
+    });
+
+    test("should create expense log with null credits if userId is not part of a team", async () => {
+      mockFindFirst.mockResolvedValue(null);
+      const webhookHandler = (await import("../../../../../../apps/web/pages/api/twilio/webhook")).default;
+
+      vi.mock("@calcom/lib/getOrgIdFromMemberOrTeamId", () => ({
+        default: vi.fn().mockResolvedValue(null),
+      }));
+
+      vi.mock("../reminders/providers/twilioProvider", () => ({
+        validateWebhookRequest: vi.fn().mockResolvedValue(true),
+        getCountryCodeForNumber: vi.fn().mockResolvedValue("US"),
+        getPriceForSMS: vi.fn().mockResolvedValue(null),
+      }));
+
+      const mockRequest = {
+        method: "POST",
+        headers: {
+          "x-twilio-signature": "valid-signature",
+        },
+        query: {
+          userId: "123",
+        },
+        body: {
+          MessageStatus: "delivered",
+          To: "+1234567890", // US number
+          SmsSid: "SM123",
+        },
+      };
+
+      const mockResponse = {
+        status: vi.fn().mockReturnThis(),
+        json: vi.fn().mockReturnThis(),
+        send: vi.fn(),
+      };
+
+      await webhookHandler(mockRequest, mockResponse);
+
+      expect(mockResponse.status).toHaveBeenCalledWith(200);
+      expect(mockChargeCredits).toHaveBeenCalledWith({
+        userId: 123,
+        bookingUid: undefined,
+        smsSid: "SM123",
+        credits: null,
+      });
+    });
+  });
+});
diff --git a/packages/trpc/server/routers/viewer/workflows/update.handler.ts b/packages/trpc/server/routers/viewer/workflows/update.handler.ts
index e3bd034d29..59721980d2 100755
--- a/packages/trpc/server/routers/viewer/workflows/update.handler.ts
+++ b/packages/trpc/server/routers/viewer/workflows/update.handler.ts
@@ -333,7 +333,7 @@ export const updateHandler = async ({ ctx, input }: UpdateOptions) => {
       });
     } else if (isStepEdited(oldStep, { ...newStep, verifiedAt: oldStep.verifiedAt })) {
       // check if step that require team plan already existed before
-      if (!hasPaidPlan) {
+      if (!hasPaidPlan && isEmailAction(newStep.action)) {
         const isChangingToCustomTemplate =
           newStep.template === WorkflowTemplates.CUSTOM && oldStep.template !== WorkflowTemplates.CUSTOM;
 
@@ -348,16 +348,14 @@ export const updateHandler = async ({ ctx, input }: UpdateOptions) => {
             throw new TRPCError({ code: "UNAUTHORIZED", message: "Not available on free plan" });
           }
 
-          if (isEmailAction(newStep.action)) {
-            // on free plans always use predefined templates
-            const { emailBody, emailSubject } = await getEmailTemplateText(newStep.template, {
-              locale: ctx.user.locale,
-              action: newStep.action,
-              timeFormat: ctx.user.timeFormat,
-            });
+          // on free plans always use predefined templates
+          const { emailBody, emailSubject } = await getEmailTemplateText(newStep.template, {
+            locale: ctx.user.locale,
+            action: newStep.action,
+            timeFormat: ctx.user.timeFormat,
+          });
 
-            newStep = { ...newStep, reminderBody: emailBody, emailSubject };
-          }
+          newStep = { ...newStep, reminderBody: emailBody, emailSubject };
         }
       }
 
@@ -419,7 +417,7 @@ export const updateHandler = async ({ ctx, input }: UpdateOptions) => {
     steps
       .filter((step) => step.id <= 0)
       .map(async (newStep) => {
-        if (!hasPaidPlan) {
+        if (!hasPaidPlan && isEmailAction(newStep.action)) {
           if (newStep.template === WorkflowTemplates.CUSTOM) {
             throw new TRPCError({ code: "UNAUTHORIZED", message: "Not available on free plan" });
           }