Welcome To The Terror of TERRL in 365
“Why are some of our emails bouncing?”
“Our system says it sent the campaign, but no one received it.”
“Why is Microsoft throttling our emails?”
If your team relies on Microsoft 365 to reach customers, clients, suppliers (or anyone outside your organisation) you might be about to hit an invisible wall.
Microsoft has quietly rolled out a limit on how many external emails your organisation can email in a day. It’s called the Threshold for External Recipient Rate Limit, or TERRL.
❗️Heads up – there’s more to come.
While TERRL is the big change right now, it’s not the only one. Later this year, Microsoft is also enforcing a per-user external email cap, known as MERRL. We’ll cover what that means (and who it affects) at the end of this post.
And once you hit that limit? Microsoft 365 starts rejecting emails. No warning. No exceptions.
Whether you’re in sales, marketing, customer support, or operations, this change could quietly derail your email comms unless you’re prepared.
Why TERRL Matters: Even If You’re Not a “Bulk Sender”
TERRL affects any business that sends a lot of emails to different people. Especially those using shared inboxes, CRMs, automation platforms, or even simple team-wide communications.
Here’s how it works:
If your emails are routed through Microsoft 365 (Outlook, CRM integrations, automated alerts, etc.), every email to anexternal address counts toward your daily TERRL.
It’s not just “mass emails.” Even one-to-one emails sent by your team (if sent at scale) contribute to the cap.
And here’s the kicker: the old “soft” limits of 10,000 emails per day, per user? Gone. Replaced by a calculated tenant-wide limit that’s often far lower than businesses expect.
What Is My TERRL?
Microsoft calculates your TERRL like this:
TERRL = 500 × (Number of Microsoft 365 Licences ^ 0.7) + 9,500
Let’s simplify that:
If you’ve got 100 Microsoft 365 licences, your limit is about 22,000 external emails per day. That sounds like a lot, but it adds up quickly:
- Marketing campaigns
- CRM sequences
- Invoicing or client alerts
- Sales prospecting
- Customer support emails
Even five team members sending to the same 200 external addresses each day is 1,000 right there. One large campaign and you’re halfway to the limit, before your helpdesk or accounts team even logs on.
✅ Check Your Email Usage in 60 Seconds
Want to know if you’re at risk? You can check in just a few clicks.
- Log into your Microsoft 365 Admin account
- Open this report: Outbound External Recipients Report
- Set the date range to 7 or 30 days
- See how close you are to your TERRL each day
If you’re hovering near the line, it’s time to act.
Want to Skip the Math? Use Our Free TERRL Calculator
We’ve built a simple tool to help you:
- Calculate your current TERRL
- See how many more licences you’d need to increase it
- Estimate costs using the lowest-cost Exchange Online licence (£3.10/month)
Use it to get clarity fast and share it with your team.
Try the TERRL Calculator now
TERRL Calculator
Already Near the Limit? Here’s What You Can Do
1. Increase Your Licences (Quick but Costly)
Each extra licence adds to your TERRL. This is the simplest fix but it’s not always the most cost-effective. We can help you review your 365 setup and avoid overpaying.
Want a second opinion on your current licence mix? Let’s talk.
2. Don’t Send Bulk from Microsoft 365
Microsoft 365 was never designed to be a mass mailing platform. Tools like CRMs or marketing automation software should be configured to send through dedicated email delivery services, not your business email server.
These platforms are purpose-built for high-volume sends and won’t count against your TERRL.
Need help reviewing your outbound setup or integrating external delivery tools? We’ve got the know-how.
3. Use a Relay Service (Best of Both Worlds)
Want to keep sending from Outlook or your CRM, but stay under the limit? You can connect services like SendGrid, Mailgun, or Postmark to relay emails. Bypassing the TERRL limit while keeping things seamless for your team.
It takes some setup but preserves your workflows and improves deliverability.
Not sure where to start? We can scope and implement the right relay for your needs. Reach out today.
Think It Doesn’t Affect You? Think Again.
This isn’t just a “recruiter problem.” We’re seeing it hit:
- Finance teams automating client reminders
- Marketing teams sending product updates
- Sales teams running outreach sequences
- Customer success teams managing onboarding
If you email lots of different people, this affects you.
Wait, Is That Everything? Not Quite – Meet MERRL
Just when you’ve wrapped your head around TERRL, there’s another important limit on the horizon: the Mailbox External Recipient Rate Limit, or MERRL.
Where TERRL is your tenant-wide cap on how many external emails you can email in 24 hours, MERRL applies at the individual mailbox level.
Starting from October 2025, Microsoft will enforce a hard limit of 2,000 external emails per mailbox, per 24-hour rolling window. That includes any message sent via Outlook, your CRM, automations, or integrations (as long as it routes through Microsoft 36).
This limit is designed to clamp down on “mass email” behaviour using standard user accounts. So if your team uses:
- CRM platforms for candidate or client outreach
- Email sequencing tools like Lemlist, Apollo, Sourcewhale, etc.
- Shared mailboxes or delegated send-as permissions
- Automated notifications or campaign triggers
…this limit applies.
Even worse? If a tool sends on behalf of your users using Microsoft 365, those emails count against that user’s MERRL. This means their mailbox can hit the cap without them even realising it.
Does It Affect Everyone?
No. And this is important.
If your team uses Microsoft 365 primarily for normal, person-to-person email? You’re probably safe.
But if your business leans on Outlook for mass outreach, this change could hit hard. Especially in sectors like:
- Recruitment
- Sales & Business Development
- Marketing Automation
- Customer Support teams using CRMs
These industries often rely on third-party tools that route bulk email via Microsoft 365 mailboxes. That’s where both TERRL and MERRL can combine to silently block or throttle outbound messages – killing your campaigns and damaging deliverability.
What Can You Do?
The good news is, this isn’t the end of email. Just a sign it’s time to adapt:
- ✅ Stop using Microsoft 365 for mass email – offload campaigns to proper bulk services.
- ✅ Use relay tools like SendGrid, Mailgun or Postmark to keep your delivery clean.
- ✅ Review your CRM/marketing tool configs – make sure they’re not relying on user mailboxes.
- ✅ Talk to us – we’ve helped recruitment agencies and sales teams build scalable, compliant outbound email workflows.
The future of outbound email in Microsoft 365 is changing. But with the right setup, you can stay ahead of it
Nxt Steps
The TERRL limit is a real, enforced cap that can silently block your outbound emails. And disrupt your business.
✅ Check your usage
✅ Use our calculator
✅ Review your email setup
And with MERRL on the way, you can’t sit back and relax just yet. If you’re anywhere close to the limit (or just want peace of mind) Nxt Gen IT can help. We’ll review your 365 usage, optimise your licensing, and recommend the right approach for your workflows.
Let’s make sure you stay in control of your comms.
👉 Speak to a Microsoft 365 expert today
Further Reading
If you’d like to learn more about TERRL, please see Microsoft’s updated announcement
Or, to learn more about MERRL, please see Microsoft’s updated announcement.
Ben helps growing businesses turn technology into a driver of performance instead of a barrier. At Nxt Gen IT he works with SME leaders, recruiters, and fast-scaling teams to design solutions that improve reliability, strengthen security, and unlock growth.
With a background in email deliverability and cloud systems, Ben specialises in making sure businesses communicate effectively, keep data safe, and get the most from Microsoft 365. His experience spans solution design, managed IT services, and virtual CIO support, always with a focus on practical outcomes that reduce headaches for business owners.
Ben has supported organisations across the UK, from recruitment agencies struggling with inbox placement to SaaS firms scaling fast, and SMEs needing a trusted partner for their IT. He believes tech is never the end goal: growth is. His role is to make sure technology never gets in the way of it.