Microsoft has announced a major change to outbound email limits in Exchange Online, which is the email service that forms part of Microsoft 365. Implementation of these new limits begins on 3 March 2025 for organisations with a small number of licenses, with all phases rolled out by the end of the month.

What’s changing?

Exchange Online has previously implemented per-mailbox daily send limits to regulate email volume to prevent spam and email misuse. Now, Microsoft is shifting to tenant-wide limits as a change from the per-mailbox limits. The new Tenant External Recipient Rate Limit (TERRL) will be based on the number of purchased email licenses within the tenant. The new limit is calculated using the formula: 500*(Purchased Email Licenses^0.7) + 9,500

For example, a tenant with a single purchased license will have a 10,000 external recipient limit over a twenty-hour hour period. This scales up as more licenses are added, but at a decreasing rate. A tenant with 10 licenses will have a limit of 12,006, whilst one with 25 licenses will have a limit of 14,259 emails.

You can send as many emails as needed within your tenant – but any unique external email recipient will count against your quota. If an organisation exceeds its daily limit, sending to external emails will be blocked, and senders will receive a bounce message. Please note that the following won’t count towards the limit:

• Automatic replies, including Out Of Office
• Postmaster messages, including DSNs, NDRs, Delivery Receipts, Read Receipts
• Email notifications from Microsoft cloud applications, including SharePoint, Teams

What’s the impact?

Reducing spam and preventing email abuse is a valid and important goal, but the implementation timeline and the limits imposed do raise some concerns.

With enforcement starting in just over a week, potentially impacted organisations have little time to adapt or find alternative solutions. Similarly, organisations with fewer licenses could find themselves hitting the new limits quickly if they rely on emails for client communication or notifications. Microsoft’s further plans to impose stricter external rate limits on individual mailboxes from October 2025 may increase this impact.

That said, this serves as a timely reminder that Exchange Online was never designed for bulk email or electronic direct mail (EDM), and organisations should use purpose-built solutions for high-volume external communications.

Next steps

If your organisation uses Microsoft 365 and sends a significant volume of external emails, you’ll need to:

• Review your email usage – A new reporting tool in the Exchange Admin Center will help organisations to track their limits and usage. This is meant to be available from 25 February 2025, although we are not yet seeing these available for everyone as yet.
• Find a mass mailing solution – Marketing emails, newsletters, and bulk communications should always be sent from a proper mass mail solution. Consider third party solutions such as Mailchimp for marketing emails and SendGrid for programmatic messages.

If you have concerns about how this change may impact your organisation, please get in touch with us to review your email practices and ensure compliance before Microsoft’s enforced changes begin in March.