!!! tip ""

    Automatic license management is recommended unless you have a
    specific reason to choose manual license management.

With automatic license management, you automatically purchase a Zulip
license for each user in your organization at the start of each billing
period (month or year), and whenever you need additional licenses.

- [Deactivating a user](/help/deactivate-or-reactivate-a-user) frees up
  their license for reuse. No refunds are given for unused licenses you
  have purchased for the current billing period. For example if you start
  an annual billing period with 10 users, and deactivate 4 users halfway
  through the year, then you will receive no refund, even if those licenses
  are not used in the remaining 6 months of the year.

- If you have no free licenses when a new user joins or an existing user
  is reactivated, you will be automatically billed for an additional
  license. You will be charged only for the remaining part of the
  billing period. For example, if you are on a $8/user/month monthly
  plan, you will be billed $4 for a user added halfway through the month.

- If you have an annual billing period, each month, you will see a
  single charge for all licenses added the previous month. If you have
  a monthly billing period, the charge for licenses added during the
  previous month will be combined with your monthly renewal charge.
