Microsoft Entra ID Free vs P1 vs P2 – What’s the Difference?

Microsoft Entra ID is available in three main editions:

• Microsoft Entra ID Free
• Microsoft Entra ID P1
• Microsoft Entra ID P2

Each edition provides different identity, access management, and security capabilities. Understanding these differences helps administrators choose the right licensing tier for their organization.

Microsoft Entra ID Free vs P1 vs P2 – Quick Comparison

Feature	Free	P1	P2
User & Group Management	✔	✔	✔
Single Sign-On (SSO)	✔	✔	✔
Multi-Factor Authentication (MFA)	✔ (basic security defaults)	✔	✔
Conditional Access	✖	✔	✔
Self-Service Password Reset (SSPR)	Limited (admins only)	✔ (users + admins)	✔
Identity Protection	✖	✖	✔
Privileged Identity Management (PIM)	✖	✖	✔

Microsoft Entra ID Free

The Free edition provides basic identity and access management capabilities.

Key Features

• User and group management
• Basic security reports
• Single Sign-On (SSO)
• Basic MFA support
• Integration with Microsoft 365 services

Best For

• Small organizations
• Basic identity management
• Microsoft 365 tenants with minimal security requirements

Microsoft Entra ID P1

Microsoft Entra ID P1 adds advanced identity management and access control features.

Key Features

• Conditional Access policies
• Dynamic groups
• Self-Service Password Reset
• Hybrid identity support
• Application Proxy

Best For

• Organizations needing stronger access control
• Environments using Conditional Access policies
• Hybrid identity deployments

Microsoft Entra ID P2

Microsoft Entra ID P2 provides the most advanced security and identity protection capabilities.

Key Features

• Identity Protection
• Risk-based Conditional Access
• Privileged Identity Management (PIM)
• Access reviews
• Advanced reporting

Best For

• Large organizations
• Security-focused environments
• Privileged access management

When Should You Use Each License?

Scenario	Recommended License
Basic identity management	Free
Conditional Access and dynamic groups	P1
Advanced threat protection and privileged access	P2

Common Questions About Microsoft Entra Licensing

• Do Microsoft 365 plans include Entra ID licenses?
  Yes. Many Microsoft 365 subscriptions include Microsoft Entra ID Free or P1 features.
• Can organizations mix different Entra licenses?
  Yes. Administrators can assign different Entra licenses to different users depending on their needs.

Do administrators need P2?

P2 is typically required for:

• Privileged Identity Management
• Risk-based access policies
• Identity protection

Conclusion

Microsoft Entra ID offers three editions—Free, P1, and P2—each designed for different identity and security requirements.

While the Free edition provides basic identity management, P1 and P2 introduce advanced security controls, automation, and identity protection features that help organizations secure access to their resources.