Exchange Online Plan 1 vs Plan 2 vs Kiosk vs Microsoft 365 Business Basic: Mailbox-Only Licensing for Shared Devices, Contractors, Shared Mailboxes, Archiving and Holds

Exchange Online is sold three ways on its own and inside every Microsoft 365 suite.

Exchange Online Kiosk is the lightweight plan. Our Kiosk page positions it for kiosk, frontline and infrequent email users and lists what it lacks: desktop Outlook, Teams, SharePoint and OneDrive. It is licensed per user, with monthly and annual terms, and the catalog shows no device-based or shared-device entitlement.

Exchange Online (Plan 1) is the standard user mailbox: custom-domain email, calendar and contacts, Outlook on the web, mobile access through Exchange-compatible clients and the built-in anti-spam and anti-malware filtering. No desktop apps, no Teams, SharePoint or OneDrive. See the Plan 1 page.

Exchange Online (Plan 2) adds the larger primary mailbox, an online archive and Litigation Hold. The Plan 2 page is explicit that desktop Outlook still needs its own license.

Microsoft 365 Business Basic wraps a Plan 1 mailbox with the web and mobile Office apps, OneDrive, SharePoint and, on the Teams-included SKU, Teams. It carries the 300-user cap of the Business family and no desktop apps; the Business Basic page lists both SKUs.

Mailbox size limits per plan are published in Microsoft's Exchange Online limits service description; read the current figures there before choosing, because they change. The Microsoft 365 Plan Optimizer treats Kiosk and Plan 1 as Outlook-on-the-web plans without the Office web apps, which is the practical difference from Business Basic.

Microsoft's service plan reference shows which Exchange plan each bundle contains, and it settles most add-on questions.

• Business Basic, Business Standard and Office 365 E1 carry Exchange Online (Plan 1).
• Business Premium carries Plan 1 plus the Exchange Online Archiving service plan, so its users already have an archive.
• Microsoft 365 E3 and E5 and Office 365 E3 carry Exchange Online (Plan 2).
• Microsoft 365 F3 carries Exchange Online Kiosk.

Two consequences. Do not buy Exchange Online Archiving for a Business Premium or E3 user; our archiving page says the same: confirm the user's plan does not already meet the requirement. And F3, which many organizations assume is a stripped mailbox, is a Kiosk mailbox with Teams and Intune around it; the F1 vs F3 vs Business Basic article covers who is eligible for it. How the Business family's 300-license limit is counted has its own article; the plan optimizer takes the conservative reading and applies the cap to the whole licensed headcount.

Every plan here is per user. The Kiosk catalog row has no device entitlement, and a tablet in a cradle does not hold a license; the people who sign in on it do. So the question for a shared device is who signs in:

• Staff who need only email: Exchange Online Kiosk, or Plan 1 if the mailbox size or the Outlook on the web features matter.
• Staff who also need Teams and a shift schedule, and who meet Microsoft's frontline definition: Microsoft 365 F3, which brings the Kiosk mailbox with it.
• Staff who need Teams and the Office web apps without the frontline test: Business Basic, inside the 300-user cap.

Contractors split the same way. A contractor with an address in your domain has a mailbox, and a mailbox needs a license: Kiosk for a read-and-reply role, Plan 1 or Business Basic when they work in Teams and SharePoint. A contractor who works from their own company's email and needs your SharePoint site or Teams channel is a guest, and guests do not need an Exchange license; our guest and external users article sets out what they do need. When the engagement ends, convert the mailbox to a shared mailbox and release the license; our offboarding guide shows the sequence, and the 50 GB rule in the next section is what makes it work at no ongoing charge.

Microsoft's shared-mailbox article gives the rules, and they are the ones auditors check.

• A shared mailbox stores up to 50 GB without a license. Unlicensed shared mailboxes created before July 2018 were provisioned at 100 GB.
• Over 50 GB, it needs an Exchange Online Plan 2 license, which lifts the limit to 100 GB.
• To add an archive, it needs Plan 2, or Plan 1 plus the Exchange Online Archiving add-on; either also allows auto-expanding archiving.
• To place it on litigation hold, the same: Plan 2, or Plan 1 plus Archiving.
• Defender for Office 365, eDiscovery (Premium) and retention policies applied to it may need licenses; Microsoft points to its security and compliance licensing guidance.

Operational limits from the same page: a maximum of 25 users, sign-in for the mailbox account should be blocked and kept blocked, only people inside the organization can use it, messages sent from it cannot be encrypted, and anyone who accesses it needs a licensed mailbox of their own. Room and equipment mailboxes are modeled the same way in our plan optimizer, no user license up to the size limit, and the Exchange Online limits service description is the place to confirm the figure. When a shared mailbox crosses 50 GB, buying Plan 2 for it is usually simpler than splitting it, but our Exchange Online Administrator on Demand service can do either.

A hold or archive requirement is what moves a mailbox up a tier, and there are two routes to it: a Plan 2 license, or a Plan 1 (or Business Basic or Standard) license with the Exchange Online Archiving add-on. Both give the archive, auto-expanding archiving and litigation hold. Which is cheaper depends on the list prices on the day and on whether the user needs anything else Plan 2 brings, such as the larger primary mailbox. Compare the Plan 2 and Archiving pages side by side; both show Microsoft's list price and the annual and monthly terms.

The pattern we see most in 20-to-500-seat tenants:

• Users on Business Premium: nothing to buy; the archive service plan is already there.
• Users on Business Basic or Standard who fall under a legal hold: add Archiving to those users only, not to the plan.
• Departed users whose mailboxes must be retained: convert to shared, and license only the ones that exceed 50 GB or must sit on hold.
• A tenant moving off a third-party archive: the Third-Party Email Archive Migration to Microsoft 365 service lands the data in the archive mailboxes the plan already includes.

Retention policies through Microsoft Purview are a separate layer; a retention policy can hold content without a litigation hold, but Microsoft's shared-mailbox guidance says licenses may be required, and the licensing guidance it references is the document to read before relying on it.

Can I license a shared iPad with one Exchange Online Kiosk license?

No. Kiosk is per user and the catalog lists no device or shared-device entitlement. Each person who signs in needs their own license.

Does a shared mailbox ever need a license?

Yes, in three cases: more than 50 GB, an archive, or a litigation hold. Each needs Exchange Online Plan 2, or Plan 1 plus Exchange Online Archiving.

Does Business Basic include an archive or litigation hold?

Business Basic carries Exchange Online (Plan 1). Add the Archiving add-on for users who need an archive or hold, or move them to Plan 2.

Which plan does a contractor need?

If they have a mailbox in your domain: Kiosk, Plan 1 or Business Basic, depending on Teams and SharePoint needs. If they use their own email and only need your sites: a guest account, with no Exchange license.

Where are the mailbox size limits for Kiosk, Plan 1 and Plan 2?

In Microsoft's Exchange Online limits service description. We do not reproduce them here because they change; the shared-mailbox figures above (50 GB unlicensed, 100 GB with Plan 2) come from Microsoft's shared-mailbox article.

• Microsoft Learn: About shared mailboxes in Microsoft 365
• Microsoft Learn: Create a shared mailbox
• Microsoft Learn: Product names and service plan identifiers for licensing
• IT Partner: Exchange Online Kiosk, Plan 1, Plan 2, Exchange Online Archiving and Microsoft 365 Business Basic subscription pages; the Plan Optimizer's shared-mailbox rule

Microsoft's Exchange Online limits service description is cited by title only; per-plan mailbox sizes were not reproduced.