Hello,
That error occurs because Windows is checking whether the email address you’re entering belongs to a domain that is registered with Microsoft Entra ID (Azure AD) or an organization’s Office 365 tenant. A personal email address (for example Gmail, Yahoo, Outlook.com) will not be recognized as a “work or school” account, so the setup wizard rejects it.
If your school or business has Microsoft 365, the administrator must provision accounts under the organization’s domain (for example ******@school.edu or ******@company.com). Only those accounts are treated as work or school identities. If you are trying to use a personal email address, you will need to select the option to set up the device with a local account or a Microsoft personal account instead.
To confirm whether your domain is registered, you can log into https://portal.office.com or https://entra.microsoft.com with the same email. If it fails, then the domain is not associated with a Microsoft tenant, and you’ll need to request an official organizational account from your IT administrator.
In short, the error is expected if you are entering a personal email. The resolution is to use an organizational account that exists in Microsoft 365 or Entra ID, or otherwise set up the machine with a local/Microsoft personal account and later join it to the organization once the proper credentials are issued.
I hope you've found something useful here. If it helps you get more insight into the issue, it's appreciated to accept the answer. Should you have more questions, feel free to leave a message. Have a nice day!
Domic Vo.