Where unused licences come from
- People who left but were never removed from the tenant.
- Accounts created for a one-off task or a project that finished.
- People who changed role and no longer use the service the licence covers.
- Seats bought in advance for growth that did not happen.
How to find them
The Active users report in the Microsoft 365 admin centre shows last activity for each service, and Microsoft Entra ID shows when each account last signed in. A practical rule is to list everyone with no sign-in or activity for 60 or 90 days, then check each name with a manager.
What to check before you remove one
- Is the person on extended leave? Inactive does not always mean gone.
- What happens to the mailbox and files? An unlicensed mailbox can eventually be deleted, so decide first.
- Is it a shared or service account? Some do not need a licence and some do. Microsoft sets out the conditions for shared mailboxes.
- Is it still used by an application or scanner? Old service accounts are sometimes still needed.
Stop it coming back
Tie licence removal to your leaver process, and consider group-based licensing so that licences follow group membership. Our Microsoft 365 licence management page covers the joiner, mover and leaver routine in more detail.
Putting a cost on it
Multiply the unused seats by what you pay per seat, then check the next invoice. A Microsoft 365 licence cost check shows the total, and reduce Microsoft 365 licence costs explains how to act on it in a sensible order.
Frequently asked questions
How long should a licence be inactive before we act?
Many businesses use 60 or 90 days as a prompt to investigate. It is a prompt, not a rule: always confirm with a manager.
Will removing a licence delete the person's data?
Not immediately, but an unlicensed mailbox can eventually be deleted. Decide what to keep before you remove the licence.
Do all accounts in the user list need a licence?
No. Some shared, room and equipment mailboxes may not. The rules have conditions and Microsoft updates them, so check the current guidance.
Innoligo is an authorised Microsoft CSP partner. This page is general information and applies whoever you buy your licences from. Microsoft changes its plans, prices and admin screens, so check the linked Microsoft pages for current detail. Microsoft, Microsoft 365, Entra and Copilot are trademarks of the Microsoft group of companies; this page is independent and is not published or endorsed by Microsoft. About Innoligo.