Compatible with Microsoft?

Microsoft is a company, not a specific application.

Given that, I assume you're referring to Microsoft Office.

Microsoft offers a version of Office and Microsoft 365 that is compatible with macOS Monterey.

At the very least, you will need a fully updated (64 bit) version of Office 2016, though Office 2016 is no longer fully supported.

You can get more information at Microsoft.com

The Mac versions of Office 2016 and 2019 are; I have both installed and running as expected on Monterey. They ran just fine on all versions.

Microsoft recently announced the latest versions of Office is M1 chip compatible; I seems to me that means Microsoft 365 and the stand alone versions are thereby compatible with Monterey. But I have no hands on experience other than 2016 and 2016.