Assigning licenses with group-based licensing in Entra ID
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Assigning licenses with group-based licensing in Entra ID
How to assign Microsoft 365 licences with group-based licensing in Entra ID: build the groups, set usage location, migrate direct assignments, fix errors.
Solving Microsoft 365 · www.solvingmicrosoft365.com/guides/how-to-assign-licenses-with-group-based-licensing-in-entra-id
Does group-based licensing need Entra ID P1?
Yes — group-based licensing requires Entra ID P1 or higher for the users being licensed this way. P1 is included in Business Premium, E3, E5, and the F-plans, so in practice most tenants already have it; tenants on Busi…
Solving Microsoft 365 · www.solvingmicrosoft365.com/guides/how-to-assign-licenses-with-group-based-licensing-in-entra-id
What happens if a user is in two groups that assign the same licence?
Nothing bad — the licence is assigned once and stays as long as the user is in at least one of the groups. Problems only arise when two groups assign conflicting service plans (for example Exchange Online Plan 1 via one…
Solving Microsoft 365 · www.solvingmicrosoft365.com/guides/how-to-assign-licenses-with-group-based-licensing-in-entra-id
Can I remove a direct licence assignment once the group assigns the same licence?
Yes, and you should — otherwise removing the user from the group does nothing. Entra shows 'Direct' and 'Inherited' on each licence; remove the direct one only after you have confirmed the inherited one is present, or t…
Solving Microsoft 365 · www.solvingmicrosoft365.com/guides/how-to-assign-licenses-with-group-based-licensing-in-entra-id
Step 1: Design the groups
One group per licence profile, not per licence. Typical set: LIC-M365-E3-Standard (E3 with everything on), LIC-M365-E3-NoTeamsPhone, LIC-M365-F3, LIC-Copilot, LIC-Visio-P2. Keep add-ons in their own groups so a user can…
Solving Microsoft 365 · www.solvingmicrosoft365.com/guides/how-to-assign-licenses-with-group-based-licensing-in-entra-id
Step 2: Create the groups
Entra admin center → Groups → New group: type Security, membership type Dynamic User, and the rule from step 1. Validate the rule with Validate rules against a few known users before saving. Dynamic membership processin…
Solving Microsoft 365 · www.solvingmicrosoft365.com/guides/how-to-assign-licenses-with-group-based-licensing-in-entra-id
Step 3: Assign the licence to the group
Entra → Groups → the group → Licenses → Assignments. Tick the product; under it, turn off the service plans you do not want (Yammer/Viva Engage, Sway, Kaizala-style leftovers, or Exchange Online if a population uses ano…
Solving Microsoft 365 · www.solvingmicrosoft365.com/guides/how-to-assign-licenses-with-group-based-licensing-in-entra-id
Step 4: Migrate direct assignments
For each user who already has the licence directly: confirm they are a member of the group and the licence shows Inherited as well as Direct, then remove the direct assignment. In bulk: Entra → Billing → Licenses → All…
Solving Microsoft 365 · www.solvingmicrosoft365.com/guides/how-to-assign-licenses-with-group-based-licensing-in-entra-id
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