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Combine 1 cup granulated sugar and ½ cup water in a small saucepan. Put the saucepan over medium-high heat and cover the pan with a lid.
Once the water has come to a rolling boil, remove the lid. Do not stir the caramel after this point. If your caramel is cooking unevenly, you can gently swirl the pot to even out the sauce.
Cook the caramel until it is a golden-brown color. Once it is dark amber, remove it from the heat and slowly add ½ cup warm milk while whisking. Be careful: The milk can boil up quickly when it hits the hot caramel. The caramel can also separate because the temperature changes too quickly.
Once the milk has been added, gently warm the mixture over medium heat. Whisk the mixture together and boil for 1 minute until the sauce thickens slightly. Add the salt and stir the mixture until it is well combined and liquid.
Once the milk has combined with the sugar and becomes completely incorporated, turn off the heat. Add 1 tablespoon unsalted butter and whisk to combine.
Allow your caramel to cool before serving.