Cost calculator
What it costs to keep a former employee's Microsoft 365 data, by option
Keep the licence, place an Exchange Online Plan 2 hold, convert to a shared mailbox, leave the OneDrive to Microsoft's archive billing, or archive to your own Azure storage with Chipmunk. Enter your leaver numbers and see what each costs over the retention period, and which ones quietly drop a data type.
Leaver data cost, by option
One year's cohort of leavers, costed over your retention period. All figures in USD; change any rate to match your agreement.
Advanced rates (Azure, Microsoft archive billing, Chipmunk)
Cohort: 40 leavers, 162 GB each (60 GB mail, 100 GB OneDrive, 2 GB chats), kept for 7 years (84 months).
| Option | What is kept | Cost over 7 years | Per leaver |
|---|---|---|---|
1. Keep the licence assigned Licence cost every month for the whole retention period. | MailFilesChats Everything, exactly as the user left it. The account stays live (block sign-in) and the seat stays paid. | $120,960.00 | $3,024.00 |
2. Exchange Online Plan 2 hold, then delete Plan 2 for one month to place the hold, then an inactive mailbox with no ongoing licence. | MailFilesChats Mail, as an inactive mailbox. OneDrive only through Microsoft's unlicensed-account billing (or a OneDrive retention policy); with billing off it is subject to deletion at 365 unpaid days even under a hold. Chats only if a Teams retention policy was already applied. | $17,120.00 | $428.00 |
3. Convert to a shared mailbox Mailbox is over 50 GB, so Exchange Online Plan 2 for the whole period (raises the limit to 100 GB). | MailFilesChats Mail only, and only while it fits: 50 GB unlicensed, 100 GB with Exchange Online Plan 2. OneDrive and chats are not kept. | $26,880.00 | $672.00 |
4. Leave the OneDrive unlicensed Microsoft's unlicensed-OneDrive billing at $0.05/GB/month, plus one reactivation at $0.60/GB. | MailFilesChats Files only, in Microsoft's archive. Reactivation lasts 30 days, and once billing is on it applies to every unlicensed account in the tenant. Mail is deleted 30 days after the licence is removed; chats are not kept. | $19,200.00 | $480.00 |
5. Chipmunk plus Azure Cool Platform fee, per archived user, plus Azure Cool storage for mail, files and chats. Cheapest that keeps all three | MailFilesChats Mail, files and chats, searchable and exportable, in your own Azure storage account with an audit trail on every job. Retention rules and immutable tiers available. | $25,043.20 | $626.08 |
For 40 leavers with 60 GB mailboxes and 100 GB OneDrives kept for 7 years, the cheapest option that keeps mail, files and chats is Chipmunk plus Azure Cool at $25,043.20 ($626.08 per leaver). The cheapest option overall is Exchange Online Plan 2 hold, then delete at $17,120.00, but it leaves at least one data type behind.
How this is calculated
- Keep the licence: 40 leavers × $36.00 × 84 months = $120,960.00.
- Plan 2 hold, then delete: 40 × $8.00 × 1 month = $320.00, plus OneDrive archive billing 40 × 100 GB × $0.05 × 84 months = $16,800.00. Total $17,120.00. The inactive mailbox itself carries no licence. Reactivating a OneDrive would add $0.60/GB on top.
- Shared mailbox: 60 GB is over 50 GB, so 40 × $8.00 (Exchange Online Plan 2, 100 GB limit) × 84 months = $26,880.00.
- Unlicensed OneDrive: storage 40 × 100 GB × $0.05 × 84 months = $16,800.00, plus one reactivation 40 × 100 GB × $0.60 = $2,400.00. Total $19,200.00. Assumes billing stays on for the whole period; with billing off the account is subject to deletion at 365 cumulative unpaid days.
- Chipmunk plus Azure Cool: platform $200.00 × 84 months = $16,800.00, plus 40 × $10.00 × 7 years = $2,800.00, plus storage 40 × 162 GB × $0.01 × 84 months = $5,443.20. Total $25,043.20. The full platform fee is charged to this one cohort here; in practice it covers every cohort you archive, so the per-leaver figure falls as more years of leavers share it.
Microsoft rates are from Microsoft Learn (unlicensed OneDrive accounts; About shared mailboxes; inactive mailboxes). Licence prices are list-price defaults; substitute your agreement. Azure Cool uses LRS as the indicative baseline.
How each option is priced
Microsoft gives you four ways to keep a leaver's data inside the tenant, each with a different licence rule, and none keeps all three data types without continuing to pay for the seat. The calculator prices each one for a single year's cohort of leavers across the whole retention period, using Microsoft's published rules.
Keep the licence assigned. Simplest and most expensive: leavers × licence price × months. It keeps everything, but the account stays live, sign-in has to be blocked, and the seat cannot be reassigned.
Exchange Online Plan 2 hold, then delete. Place a retention policy or Litigation Hold while the mailbox is still licensed, confirm it has applied, then delete the account. Microsoft converts the mailbox into an inactive mailbox with no ongoing licence, reachable through eDiscovery; the calculator charges one month of Plan 2 to place the hold. The OneDrive is not covered: once the account is deleted it becomes an unlicensed OneDrive under Microsoft's archive billing, so the calculator adds $0.05 per GB per month for the period. Teams chats survive only under a pre-existing Teams retention policy.
Convert to a shared mailbox. Free while the mailbox is 50 GB or under, per Microsoft's shared mailbox guidance. Above 50 GB it needs an Exchange Online Plan 2 licence, which lifts the limit to 100 GB; Plan 1 on its own does not. Only mail is kept.
Leave the OneDrive unlicensed. Microsoft archives an unlicensed OneDrive at day 93. Reading it again means enabling pay-as-you-go billing, $0.60 per GB to reactivate, then $0.05 per GB per month for every unlicensed account in the tenant older than 93 days. The calculator prices storage for the period plus one reactivation. Mail is deleted 30 days after the licence is removed; chats are not kept.
Chipmunk plus Azure Cool. Chipmunk archives the mailbox, OneDrive and Teams chats into Azure Blob Storage in your own subscription when the account is disabled, so the licence can be reclaimed. The cost is the platform fee for the period, the per-archived-user amount, and Azure Cool storage for the combined data. It deploys from the Azure Marketplace, and there is no per-restore fee.
The rules that break the free options
A question that comes up constantly in Microsoft 365 admin circles is why the free option turned out not to be free. The rules that catch people:
- The 50 GB shared-mailbox cap. An unlicensed shared mailbox stops sending once it reaches 50 GB and eventually stops receiving. A 94 GB mailbox converted to shared ends up licensed or trimmed.
- The hold must be placed while the mailbox is licensed. Delete the account first and the mailbox follows the standard 30-day deletion path; there is no inactive mailbox and support cannot bring it back. Confirm the hold with PowerShell before deleting the user.
- Plan 2 cannot be bought on Business Basic or Business Standard. Tenants on those plans cannot add the hold licence, so the inactive-mailbox route needs a higher plan first.
- The 60/93/275/365-day OneDrive timeline. Read-only at 60 unlicensed days, archived at 93, out of eDiscovery at 275, and subject to deletion at 365 cumulative unpaid days. From 1 July 2026 that deletion applies even where retention policies or holds exist, unless billing is enabled.
- The reactivation fee. $0.60 per GB per reactivated account, and a reactivated account stays active for only 30 days before archiving again. Enabling billing to rescue one account starts the $0.05 per GB monthly charge on every unlicensed account in the tenant.
- 30-day Teams chat retention. Without a Teams retention policy, a deleted user's chats go with the mailbox after 30 days. There is no admin-centre option to preserve chats at removal, and export is through content search.
Worked example: 40 leavers a year, 60 GB mailboxes, 100 GB OneDrives, 7 years
Using the calculator's defaults, one year's cohort is 40 people with 162 GB of data each, kept for 84 months, at a $36 licence, $8 for Exchange Online Plan 2, Azure Cool at $0.01 per GB, and Chipmunk at $200 a month plus $10 per archived user per year.
Keeping the licences costs 40 × $36 × 84 = $120,960, or $3,024 per leaver, and keeps everything. The Plan 2 hold costs 40 × $8 = $320 to place plus $16,800 of OneDrive archive billing (40 × 100 GB × $0.05 × 84), $17,120 in total: mail kept, files in Microsoft's archive with a reactivation fee waiting, chats lost. Shared mailboxes look free until the 60 GB size trips the 50 GB rule and every one needs Plan 2 for the whole period: 40 × $8 × 84 = $26,880 for mail only. Leaving the OneDrives unlicensed costs the same $16,800 in storage plus $2,400 to reactivate (40 × 100 GB × $0.60), $19,200 for files only, and only while billing stays on.
Chipmunk plus Azure Cool comes to $16,800 in platform fee (84 × $200), $2,800 per user (40 × $10 × 7) and $5,443.20 of Cool storage (40 × 162 GB × $0.01 × 84): $25,043.20 in total, or $626.08 per leaver, with mail, files and chats all kept, searchable and exportable. That is roughly a fifth of the keep-the-licence figure, and the platform fee inside it covers every cohort you archive, not just this one.
Frequently asked questions
Do I need a licence to keep an inactive mailbox?
No. Once a mailbox is inactive it consumes no licence. The hold must be placed while the user still holds a licence that supports it (Exchange Online Plan 2, or Plan 1 with the Exchange Online Archiving add-on), and before the account is deleted. The inactive mailbox is then reachable only through eDiscovery, not Outlook.
What happens to a shared mailbox over 50 GB?
It needs an Exchange Online Plan 2 licence, which raises the limit to 100 GB. Without one the mailbox stops sending at 50 GB and eventually stops receiving. Plan 1 on its own does not lift the cap; Plan 1 plus Exchange Online Archiving adds archive capacity, not primary mailbox size.
Can I put a hold on a shared mailbox?
Yes, but only with a licence: Exchange Online Plan 2, or Plan 1 with the Exchange Online Archiving add-on. Without it the shared mailbox cannot be placed on Litigation Hold, so "convert to shared and hold it" is not a free option either.
What does reactivating an archived OneDrive cost?
$0.60 per GB for the account you reactivate, and it stays active for 30 days before archiving again. Reactivation requires pay-as-you-go billing, and from that month the $0.05 per GB monthly charge applies to every unlicensed account in the tenant older than 93 days. If the user still exists in Entra ID, assigning a licence reactivates the account with no fee.
Can I keep Teams chats without a licence?
Only if a Teams retention policy was applied before the account was deleted; the chats are then held in the inactive mailbox and searchable through eDiscovery. Without a policy they go with the mailbox after 30 days. Chipmunk archives the chats to your own Azure storage before the licence is reclaimed, readable and exportable without an eDiscovery search.
Which option should I pick?
If you only need mail for a defined retention period and can place the hold before deletion, the inactive mailbox is the cheapest Microsoft-native answer. If you need files and chats as well, the choice is between paying for the seat and archiving to your own storage; the calculator shows both figures.
Archive first, then reclaim the licence
Chipmunk archives a departed user's mailbox, OneDrive and Teams chats into your own Azure Blob Storage, searchable and exportable for legal, HR and manager requests, with retention rules, immutable tiers and an audit trail on every job.