How to Create a User in Microsoft 365 Admin Center and Assign a License

Introduction

Microsoft 365 Admin Center allows administrators to manage users, licenses, security, and services from a single portal. One of the most common administrative tasks is creating a new user account and assigning the required Microsoft 365 license so the user can start accessing services like Outlook, Teams, OneDrive, and SharePoint.

This blog explains the complete process with clear, practical steps , making it suitable for beginners and IT administrators.

Prerequisites

Before you begin, ensure the following:

• You have Global Administrator or User Administrator access

• An active Microsoft 365 tenant

• Available licenses (e.g., Business Standard, Business Premium, E3, etc.)

Steps to create and Assign License

Step 1: Sign in to Microsoft 365 Admin Center

·       Open a browser and go to admin.microsoft.com

·       Sign in using an admin account

·       You will land on the Microsoft 365 Admin Center dashboard

Step 2: Navigate to Users Section

1. From the left navigation pane

2. Click Users

3. Select Active users

This page displays all existing users in your organization.

Step 3: Start Creating a New User

1. Click Add a user

2. The user creation window will open

Step 4: Enter User Information

Fill in the basic details:

• First name

• Last name

• Display name (auto-generated but editable)

• Username (e.g., [email protected])

You can choose:

• Auto-generate a password, or

• Create a custom password

Recommended: Enable “Require this user to change password when they first sign in”.

Step 5: Assign a License

This is the most important step.

1. Under Licenses , toggle Assign licenses to On

2. Select the required license (e.g., Microsoft 365 E5 Developer)

3. Enable or disable specific apps if needed:

   • Outlook

   • Teams

   • SharePoint

   • OneDrive

  Step 6: Assign Roles (Optional)

In the Roles section:

• Select User (no admin access) for regular users

• Assign admin roles only if required (e.g., Global Admin, Helpdesk Admin)

Best practice

Follow least privilege access and avoid assigning admin roles unless necessary.

Step 7: Review and Create User

1. Review all entered details

2. Click Finish adding

3. Copy or securely share the login credentials with the user

The user account is now created successfully.

Step 8: Verify User and License Assignment

To confirm:

1. Go back to Users → Active users

2. Click on the newly created user

3. Check:

   • User status: Active

   • License: Assigned

   • Services: Enabled correctly

Common Issues and Troubleshooting

1. License Not Assigning

• Ensure licenses are available

• Verify Usage Location is set correctly

2. User Cannot Sign In

• Check password sharing

• Confirm account is not blocked

• Ensure license is assigned

3. Services Not Visible (Teams/Outlook)

• License app toggle may be disabled

• Allow time for license propagation (up to 15–30 minutes)

Best Practices

• Use consistent naming conventions for usernames

• Assign only required licenses and services

• Avoid sharing passwords over unsecured channels

• Regularly audit unused users and licenses

Conclusion

Creating users and assigning licenses in Microsoft 365 Admin Center is a straightforward but critical administrative task. By following the structured steps above, administrators can ensure users are onboard securely, efficiently, and with the correct access from day one.

This process is commonly used during:

• Employee onboarding

• Project-based access provisioning

• Partner or vendor access setup