The Enterprise Agreement True-Up is the annual reconciliation that bills, in arrears, the growth in user and device counts above the term-start baseline. The price-level is locked. The mechanic is up-only. The Admodum read on the arithmetic and the renewal-time disposition.
The Enterprise Agreement licenses by user count and by device count against a term-start baseline. The baseline is the count reported at the order placed at the start of the EA term. The True-Up reconciles, once a year on the enrolment anniversary, the difference between that baseline and the actual count at the anniversary.
The reconciliation is retroactive: the buyer pays for the year in arrears at the term-locked price level. A buyer that grew from 4,000 seats to 4,800 seats over the True-Up year is billed for the 800 incremental seats for the full year at the term-locked price level, irrespective of when in the year the seats were actually added.
The wider EA framework sits at the Enterprise Agreement overview; the renewal cadence sits at the Microsoft EA renewal cycle; the wider editorial sits in the Microsoft pillar.
The price level (A, B, C, D) is set at the term-start by the qualifying count at the term-start. The level is then locked for the term, applied to the term-start order and to every True-Up that follows. A buyer that signs at level B with 3,000 qualifying seats and grows to 18,000 seats over the term continues to True-Up at level B for the full term, even though 18,000 seats would qualify for level D today.
The mechanic cuts both ways. A buyer that signs at level D with 16,000 seats and contracts to 9,000 seats over the term continues to True-Up at level D for the full term (and, in practice, has fewer seats to True-Up against). The level does not move mid-term in either direction.
The renewal-time decision is whether the next term opens at the level the current count qualifies for, or whether the count itself is being remediated before renewal. The wider price-level read sits at the EA overview; the level scale sits in the Microsoft pricing reference.
The True-Up is up-only. A buyer that reduces seat count mid-term cannot reclaim the difference; the term-start baseline is not re-baselined downward at the next True-Up. Reductions in count flow into the next renewal, where they are taken account of in the new term-start baseline; they are not refunded inside the current term.
The consequence is asymmetric. The buyer pays for every seat added; the buyer cannot recover for every seat dropped. The negotiating discipline is therefore to over-provision conservatively at term-start (the True-Up will catch growth) and to drop seats early at term-end (so the new term-start baseline is the contracted count, not the peak count).
The True-Up mechanic applies, in clean form, to the on-premises portfolio: Windows Server, SQL Server, Office (on-prem), Project, Visio, Visual Studio and the Server-and-CAL families. The cloud-subscription portfolio (Microsoft 365, Dynamics 365, Power Platform, Azure) carries different mechanics.
Microsoft 365 and Dynamics 365 on the EA enrolment can be transacted at user-count true-down at the anniversary (the cloud subscriptions can flex down) where the on-prem Server-and-CAL families cannot. Azure on the EA carries the MACC (Microsoft Azure Consumption Commitment), which is a separate construct from the True-Up; the MACC is a multi-year consumption commitment, not a user-count reconciliation.
The wider M365 plans context sits at the Microsoft 365 plans spoke; the MACC context sits at the Azure MACC design spoke; the SA context sits at the Software Assurance benefits spoke.
The third-year True-Up (on a three-year EA term, the standard tenor) is the largest True-Up by definition: it captures the cumulative growth across the term less the prior two True-Ups. It is also the True-Up that bills inside the renewal window, with the buyer's commercial position for the renewal already known.
The disposition of the final True-Up is itself a negotiation lever. The buyer that has grown materially across the term carries a large final True-Up bill at the term-locked price level; the renewal term-start baseline is then designed to absorb the growth at the renewal price level. The buyer that has contracted across the term carries a smaller final True-Up (or, where the EA enrolment includes cloud subscriptions, may have already trued-down where the on-prem residue is the only True-Up component).
The wider renewal-time disposition sits at the EA renewal cycle; the MCA-E transition context sits at MCA-E versus EA; the BATNA context sits at the Microsoft BATNA spoke (forthcoming).
The buyer-side artefacts to hold against the True-Up are: the term-start baseline (every product, every count, every price level), the per-anniversary True-Up history (every line, every quantity, every price-level read), the seat-assignment evidence (which seats were assigned for which months; against which legal entity), the cloud-subscription mix (which lines flex down at the anniversary; which do not), and the forecast for the final True-Up.
The renewal-time conversation is then a negotiation against artefacts. The publisher's renewal proposal is read against the cumulative True-Up history and the forecast for the final True-Up; the new term-start baseline is designed to absorb the validated growth at the renewal price level; the True-Up forecast against the new baseline is itself a negotiation artefact.
The wider engagement sits in the Microsoft practice; the aggregated reading list sits in the Microsoft knowledge hub; active renewal moments route to the Renewal Programme; active audit moments route to Audit Defence.
The maintenance overlay the True-Up renews against, line by line.
A senior Admodum Microsoft advisor will read your True-Up history, the term-locked price level and the forecast for the final True-Up on a private call. Active renewal moments route to the Renewal Programme.