Add the sugar and water to a 3-quart heavy bottomed pot; stir just slightly so it's combined and sits in a flat even layer, and try to avoid it going up the sides of the pot.
Warm pot over medium heat and cook until the sugar dissolves, turns from cloudy to clear, and starts to bubble - this can take a few minutes. (At this point, do not stir again - simply allow to bubble and cook - and keep your heat at medium.)
If the sugar forms clumps around the perimeter of the pot, using a spatula, you can gently brush down the sides occasionally, to prevent crystallization. But just continue cooking, without stirring, until the mixture thickens and turns a deep gold color like honey (this can take anywhere from 8-15 minutes), keeping a watchful eye so the mixture doesn’t burn. SEE NOTE BELOW.
Carefully add the butter and whisk until completely melted. (The caramel will bubble up rapidly, so be careful and continue to whisk.)
Remove the pot from the heat. Slowly pour in the heavy cream, whisking continuously until all of the cream has been incorporated.
Whisk in the vanilla and salt.
Set aside to cool in the pot for 10 minutes.
Then pour into a lidded glass jar and allow to cool completely. (The caramel will be liquid at first, but will thicken up and solidify into a chewy texture as it cools.) Once it's completely cooled, it needs to be stored in the fridge because of the dairy. Reheat to use again - see note below.)
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Notes
Be patient! The type of pot you use, the heat source, altitude, and weather can all play a role in how long it takes for the mixture to turn dark gold. Don't miss the helpful tips in the article for troubleshooting and making salted caramel.Storage. This will keep, tightly sealed, in the fridge for 3 weeks or 2 months in the freezer. Caramel solidifies in the refrigerator so it needs to be reheated - usually just 10 to 15 seconds in the microwave.