ProtonMail uses a flexible hybrid system of folders and labels to maximize productivity and organization within your inbox. The difference between the two is that folders allows users to store a message within them while labels are applied on top a message. You can apply multiple labels to a message, but only store a message in 1 folder (in addition to All Mail).
Custom Labels and Folders are displayed together in the left hand side of web app, you can tell them apart by the tab and folder icons seen next to them.
ProtonMail currently uses 7 default folders to hold all of your emails – All Mail, Inbox, Drafts, Sent, Starred, Archive, Spam, and Trash.
All Mail contains all the messages held within your account providing a centralized location to search for messages. The only way to remove a message from All Mail is to delete the message from the Trash folder.
You can move individual messages to a folder using the Move tool within a message, or move a whole conversation using the Move option within the inbox view. You will find Move to options within different folders and within conversations.
To create a label, use the Labels tab in settings or the Label Settings inside your ProtonMail inbox. A Label can also be used to emulate a Folder by applying a Label to a message and then Archiving it at the same time. This will remove the conversation from the Inbox, and put it under its own Label “folder” in the sidebar. Multiple Labels can be applied to a single message, but a message can only be in a single Folder.
You can add labels to any email regardless of which folder it resides in using the Labels drop-down found within messages and lists of messages.
By selecting Also Archive in the label dropdown, you can add labels on top of a message in addition to moving the message from its current folder to the Archive folder. If you would like to move the message to a folder other than the Archive folder, see the steps above and use the Move to option.
Please note: Labels are not stored in the label tag, they are stored in the folders (Inbox, Archive, Spam etc.). If you delete the message from the folder, the message will be deleted from the label as well.
Label and Folder limits
By Default, Free accounts have the ability to add 3 custom folders, and 20 labels. For paid ProtonMail accounts, the limits are far higher.