By Mario Vaghei, General Manager, Aire One Peel Heating & Cooling · Published November 9, 2026 · Facts verified November 5, 2026
Short answer
A split system has two separate units, one inside the home and one outdoors, joined by refrigerant lines. A packaged unit holds all of its components in a single outdoor cabinet and connects to the building's ductwork. A house with a furnace in the basement and an air conditioner or heat pump outside has a split system. Which type you have decides where the equipment sits and how a replacement is installed.
On this page
What a split system is · What a packaged unit is · Package unit vs split system at a glance · How to tell which one you have · Which one is right for a home · Thinking about a replacement · Frequently asked questions
What a split system is
Carrier describes a split HVAC system as "two separate units: one located inside the home and one outdoors". The outdoor unit holds the compressor and the outdoor coil. The indoor unit holds the indoor coil, usually on top of a furnace or inside an air handler. Copper refrigerant lines run between the two.
A ductless mini-split is also a split system: it has an outdoor unit and one or more indoor heads, with no ductwork between them. Our guide to ductless mini-split cost in Mississauga covers that type.
What a packaged unit is
In a packaged unit, Carrier says, "all components are contained in a single outdoor cabinet". The cabinet sits outside the building, on the ground or on the roof, and connects straight to the supply and return ducts. Rooftop units on stores, offices and some multi-unit buildings are packaged units.
Package unit vs split system at a glance
| Split system | Packaged unit | |
|---|---|---|
| Where the equipment is | One unit inside, one outside | Everything in one outdoor cabinet |
| Refrigerant lines | Run between the indoor and outdoor units | Contained inside the cabinet |
| Indoor space needed | Yes, for the furnace or air handler | None for the equipment itself |
| Installation | More labour-intensive, because the two units are connected on site | Simpler to set, because the unit arrives as one piece |
| Where you see it | Houses with a furnace or air handler indoors | Buildings with no indoor mechanical space, and many rooftops |
Table: Carrier, "What is a Split HVAC System?", read November 5, 2026. Carrier describes split installation as "more labor-intensive than a packaged unit".
How to tell which one you have
- Look for indoor equipment. A furnace or air handler in the basement, a closet or the attic, with a coil attached, means a split system.
- Look at the outdoor unit. A split system's outdoor unit has two small copper lines running into the house. A packaged unit has large ducts running into the building instead.
- Look at the roof. A single large cabinet on a flat roof that feeds the ducts below is a packaged rooftop unit.
Which one is right for a home
For a house that already has a furnace and ducts, a split system is the normal fit: the air conditioner or heat pump is added to the equipment that is already indoors. A packaged unit suits a building with no room for indoor equipment. If your home has no ducts at all, the choice is between adding ducts and going ductless; our comparison of ductless and central air walks through it.
Either way, the type of system does not decide the size. That comes from a load calculation for the building.
Thinking about a replacement
If you are replacing a split system, the indoor and outdoor units are matched to each other, so they are usually replaced as a set. Our pages on heat pump installation and air conditioner installation cost explain what an installation includes, and our guide to the best home heating system for an Ontario house compares the heating options. Call 905-564-8545 for a free in-home estimate.
Frequently asked questions
What is the difference between a package unit and a split system?
A split system has two separate units, one inside the home and one outdoors, connected by refrigerant lines. A packaged unit contains all of its components in a single outdoor cabinet that connects to the ductwork.
How do I know if I have a split system or a packaged unit?
If you have a furnace or air handler indoors and a separate unit outside with two copper lines running into the house, you have a split system. If one outdoor cabinet connects to the building with large ducts and there is no indoor unit, it is a packaged unit.
Is a ductless mini-split a split system?
Yes. A ductless mini-split has an outdoor unit and one or more indoor heads connected by refrigerant lines, with no ductwork.
Is a packaged unit easier to install than a split system?
Generally yes. Carrier describes split system installation as more labour-intensive than a packaged unit, because the indoor and outdoor units must be connected with refrigerant lines on site.
Are rooftop units packaged units?
Yes. A rooftop unit holds all of its components in one cabinet on the roof and feeds the ductwork below, which is what a packaged unit is.
Sources and references
- Carrier, "What is a Split HVAC System?", read November 5, 2026.