How to Add a New User in Microsoft 365 and Assign a Licence
Adding a new employee to Microsoft 365 involves creating their account, assigning the appropriate licence, setting an initial password and ensuring they can sign in to email, Teams and all Microsoft 365 apps. This guide covers the complete process using the Microsoft 365 admin centre.
Step 1: Open Microsoft 365 Admin Centre
Sign In as Administrator
Go to admin.microsoft.com and sign in with a Global Administrator or User Administrator account. The admin centre dashboard will show an overview of your Microsoft 365 subscription.
Navigate to Users > Active Users in the left sidebar to see all existing accounts.
Step 2: Create the New User Account
Click Add a User
Click Add a user (or + Add user). The Add a user wizard will open with several configuration steps.
Fill in the basic information:
- First name and Last name
- Display name: How the name appears in email and Teams (e.g. Kartik Periasamy)
- Username: The part before the @ in their email address. Use a consistent naming convention across your organisation: firstname.lastname (e.g. kartik.periasamy), firstnameinitial.lastname (e.g. k.periasamy), or firstname (e.g. kartik)
The username + your domain = the email address (e.g. kartik.periasamy@cybergate.com.my).
Step 3: Set the Password
Configure Password Settings
On the Password page:
- Auto-generate password: Microsoft creates a random 12-character password. This is the recommended option for initial accounts.
- Create password manually: You set the initial password. Must meet complexity requirements.
Enable Require this user to change their password when they first sign in. This forces the new employee to set their own password immediately, ensuring only they know it.
Note down the temporary password to share with the employee.
Step 4: Assign a Licence
Select Microsoft 365 Licence
On the Product licences page, select the appropriate licence:
| Licence | Key Features | Best For |
|---|---|---|
| Microsoft 365 Business Basic | Email, Teams, SharePoint, web Office apps only | Staff who work primarily in browser |
| Microsoft 365 Business Standard | All Basic + desktop Office apps (Word, Excel, PowerPoint, Outlook) | Most business users |
| Microsoft 365 Business Premium | All Standard + Intune, Defender, Azure AD Premium, advanced security | Staff handling sensitive data, all admin accounts |
Toggle on the selected licence. Available licences show the number of seats remaining in your subscription.
Step 5: Configure Optional Information
Set Profile Details
On the Optional settings page, fill in profile details that are useful for directories and Teams:
- Job title: e.g. IT Support Engineer
- Department: e.g. IT, Finance, Operations
- Office: Location name (e.g. Melaka HQ, KL Office)
- Phone: Direct line or mobile
- Manager: Select from existing users
These details appear in the Microsoft 365 People directory and in Teams profile cards.
Step 6: Review and Create
Finish and Send Login Details
Review all settings on the summary page. Click Finish adding. The account is created immediately.
The final page shows the user’s email address and temporary password. Click Send email to email the login details to a manager or the employee’s personal email, or Download to save the credentials as a PDF.
Remind the new user to:
- Change their password immediately on first sign-in
- Set up MFA at aka.ms/mfasetup
- Install Microsoft 365 apps from portal.office.com if needed
Need IT Help in Malaysia?
Cybergate provides Microsoft 365 Malaysia for businesses across Malaysia. Our team is available Monday to Saturday, 9am to 6pm.