Both are cooked sugar. Caramel is taken to a lower temperature and usually includes cream or milk, so it stays soft, chewy or pourable. Toffee is cooked hotter — to the hard-crack stage — and sets brittle enough to snap. Temperature is the real variable; ingredients follow from it.
The core difference
Same starting point, different final temperature.
- caramel — cooked to roughly the firm-ball stage; often with cream or butter; soft, chewy or saucy.
- toffee — cooked to hard crack; sets brittle; snaps rather than chews.
- butterscotch — brown sugar and butter, cooked to the soft-crack stage.
The transatlantic wrinkle
American usage often treats caramel as covering both, and toffee is less commonly used. British usage keeps them clearly apart, with toffee an established confectionery category in its own right. So a recipe's terms are worth reading alongside its temperatures.
Caramelisation
Caramelise also describes what happens to any sugar when heated enough to brown — including the sugars in onions. That is a chemical process rather than the confection, so caramelised onions contain no caramel.
