Assign Microsoft 365 licenses with group-based licensing

There is no need to manually assign or remove licenses for each user in the Microsoft 365 admin center. Instead, an easier way to assign licenses for multiple users is with groups. In this article, you will learn how to assign Microsoft 365 licenses using group-based licensing in Microsoft Entra admin center.

Group-based licensing in Microsoft Entra ID

Once you create a group with users in Microsoft Entra ID, you can assign one or more product licenses. All the members of the group will have the same licenses assigned. Microsoft Entra ID applies the same licenses when you add new members to a group. And when a member leaves a group, their licenses are automatically removed.

This licensing method eliminates using PowerShell to manage licenses for individual users based on organizational or department structure changes. It makes the process of assigning and removing licenses for multiple users at once more efficient.

Group-based licensing requirements

To use group-based licensing, every user must have one of the following licensing:

• Paid or trial subscription for Microsoft Entra ID P1 and above.
• Paid or trial edition of Microsoft 365 Business Premium, Office 365 Enterprise E3 or Office 365 A3 or Office 365 GCC G3, Office 365 E3 for GCCH, or Office 365 E3 for DOD and above.

Create new group with members in Microsoft Entra ID

We will create a group to assign the default Microsoft 365 licenses to all users. Then, we will create another group to add paid Microsoft 365 licenses (e.g., Power BI or Visio) for certain users.

Follow the steps to create a new group, including members in Microsoft Entra admin center:

1. Sign in to Microsoft Entra admin center
2. Expand Identity > Groups > All groups
3. Click New Group

4. Select Security
5. Enter the group name > M365_E5_Default

You can add members before and after you create the group. In our example, we will add members before creating the group.

6. Click No members selected
7. Search for the user
8. Click the tab Users
9. Select the user to add a member
10. Click Select

11. Click Create

Now, we will create a new group to assign other (paid) licenses to a few members. Follow the same steps as shown above to create a new group.

In our example, we named the group M365_E5_EXO_P2 and selected 5 members.

Go to Identity > Groups > All groups to find the two security groups you created. The next step is to assign licenses to each group in Microsoft Entra admin center.

Assign Microsoft 365 licenses to group in Microsoft Entra ID

There is another way to assign licenses to a group. You can follow the same steps we showed above or learn another way.

Follow the steps to assign licenses to the other group we created:

1. Go to Microsoft Entra admin center
2. Expand Identity > (Show more) > Billing > Licenses
3. Click All products
4. Select the checkbox Microsoft 365 E5 Developer
5. Click Assign

6. Click Add users and groups
7. Search for the group
8. Click the tab Groups
9. Select the group M365_E5_EXO_P2
10. Click Select

11. Click on the tab Assignment options or below Next: Assignment options >

12. Select the assignment options you want to include
13. Click Next: Review + assign >

14. Click Assign

You will get a notification that the licenses are assigned to the group.

Verify group-based licensing in Microsoft Entra ID

Verify you created a security group type with licensed users in Microsoft Entra ID.

Follow the below steps to find the group-based licensing:

1. Go to Microsoft Entra admin center
2. Expand Identity > Billing > Licenses
3. Click All products
4. Click on the license Microsoft 365 E5 Developer

You can see that 15 members with the license Microsoft 365 E5 Developer are assigned. In our example, 10 members of the group M365_E5_Default have all the license options, and 5 members from the group M365_E5_EXO_P2 have 1 license option (Exchange Online Plan 2) assigned.

5. Click on Licensed users

You will find a list of all the users with the Microsoft 365 E5 Developer license. Some users can have multiple licenses assigned, as you can see in the below picture.

6. Click on Licensed groups

It shows that the State is Active for both groups. The Enabled Services show how many services of the license (66/66) you assigned. For the group M365_E5_EXO_P2, we have only assigned the Exchange Online Plan 2 license (1/66).

You successfully assigned Microsoft 365 licenses with group-based licensing in the Microsoft Entra admin center!

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Conclusion

You learned how to assign Microsoft 365 licenses with group-based licensing in Microsoft Entra ID. It’s easier to bulk assign Microsoft 365 licenses to all users when creating groups in Microsoft Entra ID. This way, you can find and manage your users’ licenses.

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