PowerShell error handling for admin scripts: terminating errors, $ErrorActionPreference and $LASTEXITCODE

Goal

Make a PowerShell admin script stop on the failures that matter and report a correct outcome, instead of continuing past an error and exiting 0.

Prerequisites

Windows PowerShell 5.1 or PowerShell 7.x; for native-command exit-code handling as errors, PowerShell 7.4 or later (7.3 only with the experimental feature PSNativeCommandErrorActionPreference enabled).

Steps

1. Know the three failure shapes. A terminating error stops the current pipeline/scope immediately and is catchable with try/catch. A non-terminating error (for example from Write-Error inside a cmdlet) is written to the error stream but execution continues, unless the caller's $ErrorActionPreference or the cmdlet's own -ErrorAction says otherwise. A native executable (git.exe, robocopy.exe, ...) that returns a non-zero exit code does neither by default: PowerShell does not turn that into an error automatically.
2. Set $ErrorActionPreference = 'Stop' at the top of the script so that cmdlet-level non-terminating errors become terminating and are catchable; about_Preference_Variables documents this variable as what "determines how PowerShell responds to a non-terminating error". It does not affect native executables' exit codes.
3. Where one call should fail without aborting the whole script, override locally with -ErrorAction Stop (to catch it) or -ErrorAction SilentlyContinue/Continue (to ignore it), rather than changing the global preference. -ErrorAction only affects that command's non-terminating errors; it cannot suppress a terminating one.
4. Wrap risky sections in try { ... } catch { ... } finally { ... }. Inspect $_.Exception.Message and $_.CategoryInfo in the catch block, and use finally for cleanup that must run either way (closing a session, removing a temp file).
5. After every native-executable call, check $LASTEXITCODE explicitly (about_Automatic_Variables documents it as the exit code of the last native program or PowerShell script that ran); a non-zero value did not throw and will not be caught by try/catch unless you check it.
6. On PowerShell 7.4+ (default $false), set $PSNativeCommandUseErrorActionPreference = $true to make native commands with non-zero exit codes raise errors that respect $ErrorActionPreference, matching how cmdlet errors already behave; disable it locally inside a script block (& { $PSNativeCommandUseErrorActionPreference = $false; robocopy ... }) for tools such as robocopy that use non-zero codes to mean something other than failure.
7. At the very end of the script, propagate the real result with exit $LASTEXITCODE or a specific numeric exit code so an external caller sees success or failure correctly.

Expected result

A cmdlet error, a thrown exception and a failed native command are all caught or explicitly checked; the script's own exit code reflects what actually happened, instead of always exiting 0.

Limits and test basis

$PSNativeCommandUseErrorActionPreference is mainstream from PowerShell 7.4, was experimental in 7.3, and has no effect in Windows PowerShell 5.1. Setting $ErrorActionPreference = 'Stop' inside a script does not affect the caller's session unless it runs in the caller's scope (dot-sourced). Functions from a script module do not see the calling script's preference variables, so pass -ErrorAction Stop to them explicitly. In Windows PowerShell 5.1 (and 7.0/7.1), redirecting a native command's stderr with 2>&1 while the preference is Stop can turn a harmless stderr line into a terminating error; from 7.2 redirected stderr is no longer treated as an error record.