Combine ¼ cup water and ½ cup sugar in a medium saucepan over medium-high heat. Stir until dissolved, about 5 minutes or so. (Low heat will dry out the sugar so make sure the heat is at medium-high.)
Cover the pot while it boils, about 3 minutes. Remove the lid and stir consistently until the mixture is a light amber color.
As soon as the color change occurs, remove from heat immediately. Cool slightly.
Stir in the remaining ¼ cup water, vanilla extract and salt, if using.
Once the syrup has cooled, stir it into the vodka.
Notes
Variations
Salted caramel vodka: Add a pinch of sea salt to the vodka and shake until dissolved. Add another pinch if desired. Caramel whiskey: Use your favorite bourbon to make caramel bourbon instead.
Tips
When you heat the sugar and water together, low heat will dry out the sugar so make sure the heat is set to medium-high.How sweet and flavorful you’d like the vodka depends on the person, so add the syrup in small amounts. Taste it with a spoon after each addition and add more if desired. You will need approximately ½ to 1 ounce for every 3 ounces of vodka.