With automatic billing, you automatically purchase a Zulip license for each user
in your organization at the start of each billing period (month or year).
[Deactivating a user][deactivate-user] frees up their license for reuse.
Additional licenses are purchased automatically as needed.

With manual billing, you choose and pay for a preset user limit. If
he limit is reached, no more users can join until licenses are manually
added.

In general, selecting automatic billing is highly recommended unless you
have a specific reason to do otherwise.