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Is it mandatory to buy a user licence for each employee if a company is using the Employee module by Odoo online V. 16.4  or above? 
Or to buy a licence for each user acting as an HR officer (as an Internal user ), While all other employees to check in and check out and to create their time-off into the system can be created as portal users?

What is the best solution for that?

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Hi Osama: The licensing is based on the number of "internal users". In the case of Employees, if the employee is never going to log into Odoo, you will not need a license for them. You will need a license for employees who will be set up as internal users of Odoo. Your Odoo Account manager should be able to guide you with this.

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