Neurocognitive variability exists within the schizophrenia spectrum disorder (SSD) population, with subgroups performing at the same level as healthy samples Here we study the relationship between different levels of neurocognitive responding and real-world functioning. The participants were 291 SSD patients and 302 healthy controls that were assessed with a comprehensive neurocognitive battery. In addition, the patients were assessed with the Specific Level of Functioning Scale (SLOF). The results showed that the mean neurocognitive test responses of the SSD group were significantly below that of the control group. However, there was considerable overlap between the cognitive scores of the two groups, with as many as 24% of the patients performing above the mean healthy score for some domains. Moreover, the patients with the highest level of neurocognitive functioning reached the highest levels of practical and work-related functioning outcome skills. There was no significant relationship between neurocognitive and social function skills. The large differences in cognitive performance and their associations with functional outcome within the patient group are rarely addressed in clinical practice, but indicate a clear need for individualized treatment of SSD. Early identification of cognitive risk factors for poor real-life functional outcome is necessary in order to alert the clinical and rehabilitation services about patients in need of extra care.