Prepare your pan. Line a 9x9-inch baking dish with parchment paper, ensuring the paper covers the bottom and sides. Set it aside.Note: Avoid using wax paper here, as it may melt or stick. Combine. In a 3-quart saucepan, combine the butter, brown sugar, corn syrup, sweetened condensed milk, and salt.
Heat and stir. Place the pan over medium heat. Stir the mixture constantly with a wooden spoon as it heats, scraping the pan's bottom and sides to prevent sticking. Continue stirring until the mixture comes to a full boil.
Cook to softball stage. Once boiling, attach a candy thermometer to the side of the pan, making sure the bulb is fully submerged in the caramel mixture without touching the pan’s bottom. Cook the mixture, stirring frequently, until it reaches 236°F (soft ball stage).Tip: Hold the thermometer at eye level for an accurate reading. Add the vanilla and pour. When the caramel reaches 236°F, remove the pan from the heat. Then, carefully add the vanilla extract, stirring until the caramel is smooth and has stopped bubbling, which should take less than a minute.
Pour into dish. Immediately pour the hot caramel into your prepared dish, spreading it evenly if necessary. Be careful—the caramel will be very hot! Let it cool completely at room temperature for at least 4 hours or until firm.
Cut and wrap. Lift the caramel from the pan using the parchment paper edges once cooled and firm. Use a buttered knife to cut the caramel into 1-inch squares. Wrap each caramel square in small wax paper for easy storage and serving.
Wrapping for gifts (optional). Wrap each caramel in waxed paper to keep them fresh and prevent sticking. For one-inch caramel squares, cut waxed paper into 3 x 4-inch rectangles. Place a caramel square in the center of the waxed paper and fold the ends over, wrapping it like a little boxed gift. Start with a 12-inch square of waxed paper and cut it into strips to save on paper.