In a medium-sized sauce pan, combine the sugar and water but do not stir. Cook the sugar over medium heat for 15 to 20 minutes, until the sugar caramelizes into a rich, amber color. Do not stir the syrup while cooking, as this will cause crystals to form on the sides of the pan! The timing can also vary, depending on saucepan and stove top.
Once the syrup caramelizes, add the butter and whisk until melted. Add the heavy cream next and mix again; the sauce will foam up - take care that it doesn't run over.
Remove the caramel sauce from the heat and add the salt and vanilla extract. Allow the sauce to cool in the pan for 5 minutes, then pour into a glass mason jar for keeping. Keep the sauce at room temperature for up to 1 week, or refrigerate for a thicker caramel.
This recipe makes about 1 1/2 cups of caramel sauce