Assign Microsoft 365 licences to users and groups

What you need before step 1

Applies to: Microsoft 365, Office 365 and Microsoft Entra ID licences in a commercial tenant (as documented). Not for self-service purchases made by users, which admins cannot assign until they take them over.

8 steps

1. 1

   Check available licences

   Where: Microsoft 365 admin center > Billing > Licenses

   Sign in at https://admin.microsoft.com and go to Billing > Licenses. Note how many licences of each product are available.

   You should see: Each subscription is listed with assigned and available counts.
2. 2

   Set the usage location

   Where: Microsoft 365 admin center (Licenses step when adding a user), or PowerShell 7 on your admin PC

   When you add users in the admin center, the Assign product licenses or Licenses step asks you to select the location. For existing users missing one, find and fix them with Microsoft Graph PowerShell. Connect and sign in as a License or User Administrator.

   Connect-MgGraph -Scopes User.ReadWrite.All, Organization.Read.All
   Get-MgUser -Select Id,DisplayName,UserPrincipalName,UsageLocation,UserType -All | Where-Object { $_.UsageLocation -eq $null -and $_.UserType -eq "Member" }
   Update-MgUser -UserId user@contoso.com -UsageLocation AU

   You should see: The first command lists members with no usage location; after Update-MgUser that user drops off the list.
3. 3

   Assign a licence to one user

   Where: Microsoft 365 admin center > Users > Active users

   Select the user's row. In the right pane select Licenses and apps, expand Licenses, tick the licences to assign, then select Save changes.

   You should see: The pane confirms the change and the user's Licenses column shows the product.
4. 4

   Assign licences to several users at once

   Where: Microsoft 365 admin center > Billing > Licenses > select a product

   Select the product, then Assign licenses. In the Assign licenses panel type a user or group name and pick it from the results; you can add up to 20 users or groups at a time. Optionally select Turn apps and services on or off. Select Assign.

   You should see: The users appear in the product's list of assigned users.
5. 5

   Assign a licence to a group (group-based licensing)

   Where: Microsoft 365 admin center > Billing > Licenses

   Microsoft's current group-based licensing article documents assignment in the Microsoft 365 admin center. Go to Billing > Licenses, select Assign licenses, search for the group and select it, choose the subscription, optionally use Turn apps and services on or off, then select Assign licenses. Users without a usage location inherit the tenant's location for group-based licensing. You can assign to up to 20 groups at a time.

   You should see: The group appears on the product details page and members receive the licence. Large groups take longer.
6. 6

   Check for group licensing errors

   Where: Microsoft Entra admin center > Billing > Licenses > Overview, or Groups

   Sign in at https://entra.microsoft.com, select Billing > Licenses > Overview. If any group has licensing errors an information box appears; select it to see the groups. You can also open Groups, select the group and select the error notification to see affected users. In the Microsoft 365 admin center the same detail is on the product's Errors & issues tab. Fix the cause, then select the group or user and choose Reprocess.

   You should see: No information box or error notification is shown, and the Errors & issues tab is empty.
7. 7

   Assign licences with PowerShell

   Where: PowerShell 7 on your admin PC, connected with Connect-MgGraph as above

   List your subscriptions to find the SkuPartNumber (for example SPE_E3 or SPE_E5), then assign. Available licences are ActiveUnits minus WarningUnits minus ConsumedUnits.

   Get-MgSubscribedSku | Select-Object SkuPartNumber, SkuId, ConsumedUnits
   $sku = Get-MgSubscribedSku -All | Where-Object SkuPartNumber -eq "SPE_E3"
   Set-MgUserLicense -UserId user@contoso.com -AddLicenses @{SkuId = $sku.SkuId} -RemoveLicenses @()

   You should see: Set-MgUserLicense returns the user object without errors.
8. 8

   Move a user from one licence to another

   Where: PowerShell 7 on your admin PC

   Remove the old SKU and add the new one. For group-based licensing, Microsoft's order is: add the user to the new group, confirm the new licence on the user's Licenses page, then remove them from the old group.

   $old = Get-MgSubscribedSku -All | Where-Object SkuPartNumber -eq "SPE_E3"
   $new = Get-MgSubscribedSku -All | Where-Object SkuPartNumber -eq "SPE_E5"
   Set-MgUserLicense -UserId user@contoso.com -AddLicenses @{} -RemoveLicenses @($old.SkuId)
   Set-MgUserLicense -UserId user@contoso.com -AddLicenses @{SkuId = $new.SkuId} -RemoveLicenses @()

   You should see: The user holds only the new licence.

Expert tips

How to confirm it worked

• In the Microsoft 365 admin center, open Users > Active users, select the user and check Licenses and apps shows the licence.

• In PowerShell: Get-MgUserLicenseDetail -UserId user@contoso.com | Select-Object SkuPartNumber lists the SKU you assigned.

• For groups: Billing > Licenses > the product > Errors & issues shows no users.

How to reverse it

Errors you might see

Questions

Official sources

Vendors change menus and requirements. Confirm on the source before you rely on a detail. Last checked 4 Nov 2026.