Business Central licensing is simple at the top and full of detail underneath. Most companies need only two or three licence types, but choosing the wrong one for a group of users, typically a full licence for someone who only approves documents, is the most common way to overpay.
This guide follows the Dynamics 365 Licensing Guide, September 2026 edition, which now covers Business Central online in a chapter of the combined guide. It deliberately leaves out prices: they differ by country and they change. Microsoft's most recent Business Central price change took effect on 1 November 2025, for new subscriptions and for existing ones at their first renewal after that date.
The licence types at a glance
| Licence | Who it is for | What it includes |
|---|---|---|
| Essentials | Full users | Finance, sales and CRM, purchasing, inventory and warehouse, projects and basic HR |
| Premium | Full users who need service or manufacturing | Everything in Essentials, plus service management and manufacturing |
| Team Members | Occasional users | Reading, editing existing records, approvals, quotes and time sheets (see below) |
| Device | A shared device, such as a point of sale or warehouse terminal | Limited access to a subset of Business Central, not full user capabilities |
| External Accountant | Your outside accountant | Full use rights except user setup and administration, up to three per company tenant |
Full user and Team Members licences are assigned to named users: one person, one licence, even if they only log in once a week. Business Central online is bought through a Microsoft Cloud Solution Provider (CSP) partner.
Two further kinds of access need no Business Central licence of their own:
- Microsoft 365 users can view Business Central records that colleagues share in Microsoft Teams, read-only, as long as the tenant has at least one Business Central licence.
- Your partner can support you through delegated administration. Partner administrators cannot, however, run job queues or provide accounting services; that needs an External Accountant licence.
Essentials or Premium?
Choose Premium only if you use service management (service orders, service items, contracts, planning and dispatch) or manufacturing (production orders, production BOMs, machine centres, capacity and supply planning). Everything else a typical distribution, trading or services company needs is in Essentials.
The rule that catches companies out is how the two combine. Essentials and Premium users cannot work in the same environment: users can only access an environment whose experience they are licensed for. In practice, if your production environment runs with the Premium experience, every full user in it needs Premium. A company can run Essentials and Premium in separate environments on the same tenant.
What Team Members can actually do
Team Members is the licence that saves the most money, and the one most often misunderstood. According to the current licensing guide, a Team Members user can:
- Read anything in Business Central they have permission to see.
- Update existing records and entries, for example an existing customer, vendor or item, or the due date on a customer ledger entry.
- Approve or reject workflow tasks assigned to them, for records Team Members can access.
- Create, edit and delete sales and purchase quotes.
- Edit their own time sheets for approval, and maintain their own personal information.
- Use the Power Apps and Power Automate rights that come with a Dynamics 365 licence.
What they cannot do is just as important: create new customers, vendors or items, or create orders and invoices. Anything outside the list above needs a full licence. The limits are enforced by the product itself: Team Members entitlements override permission sets, even SUPER, so a generous permission set does not turn a Team Member into a full user.
Approvers, managers who mainly read reports, and staff who update records occasionally are usually Team Members, not full users.
Environments and storage
Every Business Central online tenant includes:
- One production and three sandbox environments.
- Database storage of 80 GB per tenant, plus 3 GB for each Essentials user, 5 GB for each Premium user and 1.5 GB for each Device licence, pooled across the tenant.
If you need more, an Additional Environment add-on gives one more production and three more sandbox environments with 4 GB of storage, and Database Capacity add-ons are sold in 1 GB and 100 GB packs. Going over your storage does not stop transactions, but it does block creating and copying environments until you free space or buy more.
Storage often grows through logs, change history and attachments, so a periodic clean-up can postpone the need for extra capacity.
Copilot and agents
Copilot in Business Central is included in Essentials and Premium at no extra cost. Microsoft notes that fair-use limits or pricing could be introduced later. Agents, such as the Sales Order Agent and the Payables Agent, are different: they need a Business Central licence plus Copilot Credits, which are sold separately, pay-as-you-go or in prepaid packs.
Where companies overpay
- Full licences for approvers and occasional users who would be fully covered by Team Members.
- Premium for everyone when nobody uses service management or manufacturing.
- Licences for people who have left, still assigned and still renewed.
- Extra storage bought early, when a clean-up of logs and history would have freed enough.
A licence review before each renewal catches all four. It is the first thing we look at when a company moves its Business Central licensing to us.
On-premises, briefly
Business Central on-premises is licensed separately, as perpetual licences with an enhancement plan or as monthly subscriptions. On-premises, Essentials and Premium cannot be mixed at all: moving to Premium means moving every full user. Customers with an online subscription also have dual-use rights to install Business Central on-premises for as long as the subscription runs.
We sell Dynamics 365 and Business Central licences as a Microsoft CSP partner, and run licence reviews that tell you where the savings are, including when there are none.
Sources
- Microsoft: Dynamics 365 Licensing Guide (September 2026 edition; Business Central chapter, Team Members and capacity sections)
- Microsoft Learn: Licensing in Business Central
- Microsoft Learn: Access Business Central with a Microsoft 365 licence
- Microsoft Learn: Delegated administrator access
- Microsoft Learn: Copilot in Business Central FAQ
- Microsoft: Business Central pricing changes effective November 2025
Written by
Stefan Šošić
Co-founder & CEO, BCILITY · Microsoft MVP
Stefan co-founded BCILITY and is a Microsoft MVP. He writes about Business Central development, AL performance, telemetry and AppSource on his own blog.
