Why does Sql Server keep executing after raiserror when xact_abort is on?

This is By Design^TM, as you can see on Connect by the SQL Server team's response to a similar question:

Thank you for your feedback. By design, the XACT_ABORT set option does not impact the behavior of the RAISERROR statement. We will consider your feedback to modify this behavior for a future release of SQL Server.

Yes, this is a bit of an issue for some who hoped RAISERROR with a high severity (like 16) would be the same as an SQL execution error - it's not.

Your workaround is just about what you need to do, and using an explicit transaction doesn't have any effect on the behavior you want to change.

If you use a try/catch block a raiserror error number with severity 11-19 will cause execution to jump to the catch block.

Any severity above 16 is a system error. To demonstrate the following code sets up a try/catch block and executes a stored procedure that we assume will fail:

assume we have a table [dbo].[Errors] to hold errorsassume we have a stored procedure [dbo].[AssumeThisFails] which will fail when we execute it

-- first lets build a temporary table to hold errorsif (object_id('tempdb..#RAISERRORS') is null) create table #RAISERRORS (ErrorNumber int, ErrorMessage varchar(400), ErrorSeverity int, ErrorState int, ErrorLine int, ErrorProcedure varchar(128));-- this will determine if the transaction level of the query to programatically determine if we need to begin a new transaction or create a save point to rollback todeclare @tc as int;set @tc = @@trancount;if (@tc = 0) begin transaction;else save transaction myTransaction;-- the code in the try block will be executedbegin try declare @return_value = '0'; set @return_value = '0'; declare  @ErrorNumber as int,  @ErrorMessage as varchar(400),  @ErrorSeverity as int,  @ErrorState as int,  @ErrorLine as int,  @ErrorProcedure as varchar(128); -- assume that this procedure fails... exec @return_value = [dbo].[AssumeThisFails] if (@return_value <> 0)  raiserror('This is my error message', 17, 1); -- the error severity of 17 will be considered a system error execution of this query will skip the following statements and resume at the begin catch block if (@tc = 0)  commit transaction; return(0);end try-- the code in the catch block will be executed on raiserror("message", 17, 1)begin catch  select   @ErrorNumber = ERROR_NUMBER(),   @ErrorMessage = ERROR_MESSAGE(),   @ErrorSeverity = ERROR_SEVERITY(),   @ErrorState = ERROR_STATE(),   @ErrorLine = ERROR_LINE(),   @ErrorProcedure = ERROR_PROCEDURE();  insert #RAISERRORS (ErrorNumber, ErrorMessage, ErrorSeverity, ErrorState, ErrorLine, ErrorProcedure)   values (@ErrorNumber, @ErrorMessage, @ErrorSeverity, @ErrorState, @ErrorLine, @ErrorProcedure);  -- if i started the transaction  if (@tc = 0)  begin   if (XACT_STATE() <> 0)   begin     select * from #RAISERRORS;    rollback transaction;    insert into [dbo].[Errors] (ErrorNumber, ErrorMessage, ErrorSeverity, ErrorState, ErrorLine, ErrorProcedure)     select * from #RAISERRORS;    insert [dbo].[Errors] (ErrorNumber, ErrorMessage, ErrorSeverity, ErrorState, ErrorLine, ErrorProcedure)     values (@ErrorNumber, @ErrorMessage, @ErrorSeverity, @ErrorState, @ErrorLine, @ErrorProcedure);    return(1);   end  end  -- if i didn't start the transaction  if (XACT_STATE() = 1)  begin   rollback transaction myTransaction;   if (object_id('tempdb..#RAISERRORS') is not null)    insert #RAISERRORS (ErrorNumber, ErrorMessage, ErrorSeverity, ErrorState, ErrorLine, ErrorProcedure)     values (@ErrorNumber, @ErrorMessage, @ErrorSeverity, @ErrorState, @ErrorLine, @ErrorProcedure);   else    raiserror(@ErrorMessage, @ErrorSeverity, @ErrorState);   return(2);   end  else if (XACT_STATE() = -1)  begin   rollback transaction;   if (object_id('tempdb..#RAISERRORS') is not null)    insert #RAISERRORS (ErrorNumber, ErrorMessage, ErrorSeverity, ErrorState, ErrorLine, ErrorProcedure)     values (@ErrorNumber, @ErrorMessage, @ErrorSeverity, @ErrorState, @ErrorLine, @ErrorProcedure);   else    raiserror(@ErrorMessage, @ErrorSeverity, @ErrorState);   return(3);  end end catchend

Use RETURN immediately after RAISERROR() and it'll not execute the procedure further.