How Microsoft sizes a true up

A true up bills you once a year for everything you added above your baseline. Understanding how Microsoft arrives at that figure is the first step to controlling it, because the demand you receive is an opening position, not a settled bill.

Under an Enterprise Agreement, you license a baseline at the start and then report growth each year through a true up. It feels routine, almost administrative, which is exactly why it is so often overpaid. The true up is where a year of unmanaged growth lands in a single invoice, and the number Microsoft presents is built from assumptions and data that you are entitled to examine. This article explains how that number is assembled, so you can see where it comes from and where it can move.

What a true up actually measures

A true up measures the increase in your use of licensed products over the agreement year, above the baseline you already hold. If you added users, deployed more servers, or grew your cloud footprint, the true up is where you account and pay for that growth. It is forward looking and contractual, a normal part of how an Enterprise Agreement works, and it is distinct from an audit, which looks backward to check compliance. For the line between the two, see how an audit differs from a true up.

The data Microsoft draws on

In 2026, Microsoft does not wait passively for your count. It holds a great deal of data about your estate and uses it to frame what it expects the true up to show. The main sources shape the conversation.

• Microsoft 365 and Azure telemetry, which reflect active users and consumption directly
• Management tooling signals that indicate deployed products across the estate
• Your own prior true ups and purchase history, which set the trend Microsoft expects to continue
• Account team knowledge of projects, migrations, and growth that imply new licensing

This data lets Microsoft form a view of what your true up should be before you submit it, and that view can anchor the discussion high. A customer who has done its own count can meet that view with evidence rather than accept the framing.

How the figure is built

The sizing follows a clear logic, and seeing each step shows where judgment enters.

Indicative. The exact mechanics depend on your agreement, your products, and the price levels you negotiated.

Each step contains room for interpretation. What counts as active use, how a product is measured, whether a deployment is truly net new or was already entitled, all affect the increase. The number is precise only in appearance. In substance it rests on choices that can be examined and challenged.

Why the first number is rarely the final number

Because the true up is a count rather than a fixed charge, the first figure put in front of you reflects Microsoft's reading of the data, often the reading least favorable to you. Overstated active user counts, deployments that were already entitled, products measured on the wrong metric, and growth attributed to net new use when it was a reassignment all inflate the figure. A customer who recounts carefully, with its own evidence, frequently finds the defensible number is materially lower than the one first presented.

This is the same principle that runs through every Microsoft engagement. The opening position is not the outcome. The work of reducing the true up before you submit is exactly this: counting accurately and on your own terms before the figure is locked in.

The next step

A true up is sized from data and assumptions you can inspect, which means the demand is negotiable in everything but name. The full method for managing the annual demand sits in our pillar, the Microsoft Audit Survival Guide. To go further, read reducing the true up before you submit and the true up demand letter explained. Download the guide below for the full true up method and the data sources behind the number.

If the timeline is already running, we challenge inflated counts through our EA true up defense work.