Microsoft is rolling out a new feature for Exchange Online called Tenant Outbound Email Limits. Also known as Tenant External Recipient Rate Limits (TERRL), these limits restrict the number of external recipients an Exchange Online (Office365) can send emails to within a 24-hour period. The limits apply collectively to all the mailboxes in an Exchange Online tenant.
How are the Limits Calculated?
The limits are based on the number of email licenses your organization has, and it can be calculated based on the following formula
500 * (Number of Non-trial Email Licenses^0.7) + 9500
For instance, if there are 100 licenses in a tenant, the TERRL would be 500× (100^{0.7}) + 9500, which is approximately 22060.
Based on the calculation above, an Exchange Online tenant with 100 email licenses would be able to send approximately 22060 external emails in 24 hours. This is a total limit that applies to all the mailboxes in a tenant. The external recipients in Distribution groups are counted individually against this TERRL, so the users must be cautious about the limitations while sending emails to the Distribution groups that have external recipients.
The following email types are not considered external emails, so they are not counted under TERRL.
- Journaling emails
- Automatic replies (Including Out of Office)
- Delivery Receipts, Non-Delivery Receipts, Read Receipts
- Email notifications from Microsoft Soft services
- Messages sent through Azure Communication services and High-Volume Email services
Rollout Schedule
Microsoft is rolling out this limitation based on Tenant size as per the schedule below:
- April 3, 2025: Tenants with 25 or fewer email licenses.
- April 10, 2025: Tenants with up to 200 licenses.
- April 17, 2025: Tenants with up to 500 licenses.
- May 1, 2025: All remaining tenants.
What Happens If the Organization Exceeds the Limit?
If an organization exceeds the daily outbound email limit, any further emails to external recipients will be blocked until the volume for the last 24 hours drops below the quota. Senders will receive a Non-Delivery Report (NDR) indicating that their message couldn't be sent due to exceeding the limit. The block would be at the tenant level, so none of the users in the organization would be able to send external emails until the volume drops below the quota.
How to Monitor the Usage for the Organization?
Microsoft provides a new report in the Exchange Admin Center (EAC) called "Tenant Outbound External Recipients." This report will show the current email volume, the tenant's daily quota, and how much of the quota has been used. It will also indicate if any messages have been blocked due to exceeding the limit.
Recommendations
- For organizations that need to send a large number of emails to external recipients, Microsoft recommends using “Azure Communication Services email” or the “High-Volume email” (HVE) service. These services are designed to handle bulk or high-volume emailing needs and are also excluded from TERRL.
- Monitor the Auto-forwarding of the emails set on the user mailboxes to ensure they don’t add to the limits.
- The policies that are defined in the Email hygiene solutions such as “Defender for Office 365”, Mimecast, and Proofpoint need to be adjusted to alert the administrators when a large number of external emails are sent out of the tenant.
- Tighten the Conditional Access policies to prevent malicious actors from gaining access to the user mailboxes and block the external email flow by hitting the TERRL limits.
- Administrators to monitor the usage reports periodically and ensure the external email volume is always under the limits.
Conclusion
Helient strongly suggests the Administrators be aware of the TERRL and take necessary actions based on the recommendations provided. If you would like more information or assistance on setting up the best practices, please contact our industry-leading experts at service@helient.com.
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