Add sugar to a small saucepan in an even layer over medium heat. Let it sit without stirring, until the edges begin to melt and turn golden. Gently swirl the pan until the sugar is fully melted and a light amber color, about 4-5 minutes. Be sure to watch it closely as it can go from amber to burnt quickly.
Carefully pour in the water. The mixture will likely bubble up vigorously and hard caramelized bits may form. Stir over medium heat until any hardened bits fully dissolve, about 2 minutes. Remove from heat.
While the syrup is still warm, add marshmallow fluff and whisk until completely smooth and incorporated. If it's not fully dissolving, you can return the pan to low heat for 30-60 seconds while whisking.
Stir in vanilla extract and salt.
Strain mixture through a fine mesh strainer into a heat-proof bowl or mason jar and let cool completely.
Store in the fridge in an airtight container for up to 2 weeks.