Line an 8x8 inch baking pan with parchment paper and lightly grease with butter or cooking spray.
In a small saucepan, warm the cream and butter over low heat until butter melts. Remove from heat and stir in vanilla and 1 teaspoon sea salt. Set aside.
In a medium heavy-bottomed saucepan, combine sugar, corn syrup, and water. Cook over medium-high heat, stirring until sugar dissolves.
Once mixture begins to boil, stop stirring and attach a candy thermometer to the pan. Cook until temperature reaches 350°F (this takes about 15-20 minutes).
Remove from heat and carefully pour in the cream mixture (it will bubble vigorously!). Stir gently to combine.
Return to medium heat and cook, stirring occasionally, until mixture reaches 248°F (firm ball stage), about 5-8 minutes.
Immediately pour caramel into prepared pan (don't scrape the bottom of the saucepan). Let cool for 5 minutes, then sprinkle with flaky sea salt.
Allow to cool completely at room temperature for 3-4 hours or overnight.
Remove from pan and cut into 1-inch squares using a sharp knife. Wrap individual caramels in wax paper squares.
Store wrapped caramels in an airtight container at room temperature for up to 3 weeks.