Exchange Online Tenant External Recipient Rate Limit (TERRL)
Attention Exchange Online Administrators! If you were unable to catch the latest update to Microsoft’s “techcommunity” platform on February 24, 2025, you may not have heard about a new metric called Tenant External Recipient Rate Limit (TERRL). Soon to be part of every Exchange environment.
Starting in March 2025, these new types of limits will apply to the total number of emails that are sent to recipients outside an organization.
This is not a minor change but a fundamental shift in the present behavior of how an Exchange Online server processes outbound emails.
Don’t worry, as we will break down everything that is there on Microsoft’s official announcement about this new TERRL metric in simple and easy-to-understand language.
Let us start off by dissecting the acronym word by word.
What is Exchange Online’s Tenant External Recipient Rate Limit (TERRL)?
The most simple way to understand TERRL is to think of it as a 24-hour rolling style Tenant-wide ceiling on the number of emails a user can send to people outside their organization.
Tenant: This means it applies to your whole Exchange Online organization.
External Recipients: This indicates the limit is on messages sent to people outside your organization’s accepted email domains.
Rate: A record of how many different external people you emailed in the last 24 hours is kept under this new metric.
Limit: Defines the maximum number of external people you can email per day. If you reach it, you’ll be blocked until the count goes down from emails sent earlier than 24 hours ago.
Every message that does not come under any one of these will be counted toward the TERRL quota
- Journaling
- Automatic/Out of Office replies
- DSNs (NDRs, Delivery Receipts, Read Receipts)
- Messages sent using Azure Communication Services email and Exchange Online High-volume Email offerings
- Email notifications from Microsoft cloud applications e.g. SharePoint, Teams, Yammer
Now that the terminology is understood let us see the underlying mathematical function which will be used to calculate this value.
Formula for the Exchange Online’s Tenant External Recipient Rate Limit (TERRL)
Here’s the formula Microsoft will use:
TERRL = 500 * (Purchased Email Licenses ^ 0.7) + 9500
Let’s break down this formula:
Purchased Email Licenses: This is the only variable in the entire formula. It stores the total number of licenses you have that include Exchange Online or Exchange Online Protection.
^ 0.7: This power of 0.7 is what causes the “decreasing rate per license” effect. It is an exponent whose value is kept at < 1.
So even a large increase in the number of licenses only produces a fractional increase in the actual message quota.
500 and 9500 (constants): These fixed numbers in the formula establish the baseline limits. Where 500 is a multiplying factor and 9500 is added at the end.
Important to note: For trial tenants, the limit is a flat 5,000 total external recipients per day, regardless of the number of trial licenses.
Based on this formula, we can predict a daily quota of sorts that puts a maximum limit.
| Number of Purchased Email Licenses | Estimated Tenant External Recipient Rate Limit (TERRL) |
| 1 | 10,000 |
| 5 | 10,820 |
| 25 | 11,757 |
| 200 | 14,737 |
| 500 | 16,879 |
| 5000 | 25,764 |
Knowing these limits is just one part of admins must also have an idea when these changes will hit their organization for that too there is a fixed schedule. Microsoft won’t add this update to organizations at once release plan surely backs up this claim.
Rollout Schedule – When Does Enforcement Begin?
Microsoft is planning to roll out the feature in a phased manner, starting in March 2025.
For organizations preparing to migrate from one Office 365 tenant to another, understanding the rollout schedule is particularly important to avoid any email disruptions during the transition.
The organizations with a lower total license count would be the first ones that interact with the new system. The overall release schedule is as follows; you can plan accordingly:
- Phase 1 (March 3rd): Tenants with <= 25 email licenses.
- Phase 2 (March 10th): + tenants with <= 200 licenses.
- Phase 3 (March 17th): + tenants with <= 500 licenses.
- Phase 4 (March 31st): + all remaining tenants.
Why is Microsoft Implementing TERRL, and What Can Organizations Do to Prepare?
Microsoft’s main aim with this new limit is to “prevent misuse of Exchange Online resources and ensure availability for all users.”
Which means:
- Prevention of Bulk Email Abuse: Microsoft understood that Exchange Online’s email delivery system was being exploited to send a high volume of low-value unsolicited marketing/promotional emails. To discourage this practice instead of an outright ban a better strategy was to impose limits.
- Promotion of Secure & Quality Service: Microsoft’s internal records show that for the vast majority of organizations, the addition of this message limit will have little to no effect. As it does not affect the internal communication. Moreover, it acts as a barrier in case an official account has been compromised and is being used to send spam on a large scale.
Once available, admins can check their tenant’s TERRL value through the Exchange Admin Center itself. Moreover, it is a recommended practice to keep track of the organization’s email-sending patterns to maintain good Office 365 hygiene and implement strong M365 data backup strategies.
Login to Exchange Admin Center (EAC) and go to Reports > Mail Flow:
There you will see
- Total calculated TERRL quota (based on the formula and your licenses).
- The current 24-hour outbound volume of external recipients.
- Present quota usage percentage.
- If there are any blocked recipients due to limit breaches.
- Enforcement status (Enabled/Disabled).
Likewise, those admins who prefer scripting over GUI modules can use the new Get-LimitsEnforcementStatus PowerShell cmdlet.
If any sender exceeds their daily limit, they receive this message
For Trial Tenants: 550 5.7.232 Your message can’t be sent because your trial tenant has exceeded its daily limit…
For Non-Trial Tenants: 550 5.7.233 Your message can’t be sent because your tenant exceeded its daily limit…
If sending high-volume mail is a business priority, use Azure Communication Services email instead.
Implications for the On-Premise Exchange Server 2016 and 2019 Expiry
Although TERRL is an Exchange Online limit, admins should understand that every email sent to external recipients, irrespective of the point of origin (on-premises, Exchange Online mailboxes, or Internet Webmail), will count against the quota.
So those who operate a hybrid system must stay vigilant, as they might not be immune from this based on the configuration.
Moreover, as the Exchange Server 2016 and 2019 EOL is almost upon us, use this opportunity to get to a fully cloud-based system.
Large organizations with 500+ licensed users still have until the end of March before Exchange Online’s Tenant External Recipient Rate Limit (TERRL) goes live. Getting on the cloud before that provides tremendous advantages, and professional tools like the SysTools Exchange to Office 365 Migration can help you migrate from Exchange 2019 to Microsoft 365 ASAP.
Conclusion
In this blog post, readers got to know all about the new tenant outbound email limits and why Microsoft is implementing this to prevent mass email spam.
Admins can predict what their daily limit would be by putting their license count in the TERRL formula. Moreover, with active planning on how to handle business-critical high-volume external email scenarios (potentially with Azure Communication Services), you can stay on top of all compliance requirements and avoid any disruption to your outbound email flow.
Frequently Asked Question
- Q. Our enterprise operates a Multi Tenant Organization. Will we be able to send mail freely or will the TERRL affect us?
Microsoft is well aware of its multi-tenant customers and as a result provides exceptions to all officially designated Multi-Tenant Organization (MTO). They are considered internal and do not count against the TERRL. - Q. We have a Hybrid environment. Does the TERRL limit the number of emails we can send over in a day?
No Emails from Exchange Online to on-premises mailboxes do not count if the on-premises domains are configured as accepted domains within the Exchange Online tenant. This clarifies a specific hybrid scenario. - Q. When did the rollout of the feature complete?
Enforcement started in April 2025 and was completed for all tenants by May 1, 2025.
