In a medium saucepan over medium-high heat, add your sugar and water. The heat will melt your sugar into a liquid. Gently stir if needed. Try to keep the sugar and water in the bottom of the pan and not up the sides, as it will crystalize.
Once the sugar has dissolved and is beginning to boil, reduce your heat to medium and without stirring, allow the mixture to gently boil.
Keep an eye on the pot. You’ll see the liquid begin to turn a yellow-ish color, then light brown.
It begins as a slow process, but once the liquid starts to turn light brown, you’ll want to keep your eyes and nose on the pot. If it begins to smell burnt, lift the pot off the heat for a moment, turn the heat down to low, then return the pot to the burner.
Watch for the bubbling sugar to turn a medium-amber color, about 6 or 7 minutes, depending on your heat source and temperatures.
Once the color of the liquid sugar is a medium amber color, turn off the burner and remove the pot from the heat.
Watch out – as you add your next ingredients, the mixture will bubble up and be VERY hot.
Slowly add the heavy cream and vanilla, stirring until all is incorporated. Then add the butter and stir until melted, blended well, and the caramel has stopped bubbling.
Add salt according to taste. The caramel will still be very hot; do not just taste the caramel without cooling.
Allow the caramel to cool for about 15 minutes in the pot before scraping it into a bowl to completely cool.
Or, serve the salted caramel warm over ice cream or other well-deserving desserts.