In a medium saucepan (I recommend stainless steel) over medium-low heat, combine sugar and water. Stir while sugar dissolves. Once dissolved, turn heat to medium-high and let the mixture cook without stirring until it turns a deep amber color, about 8-10 minutes.
While whisking the mixture, slowly pour in the warm heavy cream. Mix in butter and salt, until smooth.
Remove caramel from heat and stir in vanilla.
Let cool before transferring to a mason jar or other airtight container. Store in fridge for up to 2 weeks.