Heat a large 2 or 3-quart heavy bottom stockpot set over medium-high heat. Caramel sauce will rise when butter and cream are added towards the end.
Add water and sugar. The water will help the sugar to cook evenly. More water can be added if you are having trouble with sugar sticking to the bottom of the pan.
Whisk mixture continuously. I used a silicone spatula and whisk to help me stir the mixture. Careful not to fling sugar as it will be hot. This step may take up to 5 minutes or longer. Keep whisking until sugar dissolves and turns to a golden brown color. Carefully remove any harden sugar chunks with a spoon that are not melting.
Once sugar is completely melted, carefully add in butter. The mixture will rise in the saucepan, keep stirring until melted.
Remove pan from heat and carefully pour in half and half or cream. Whisk to combine.
Stir in salt, if using. I like to add salt to make this salted caramel sauce.
Allow caramel sauce to cool; 10 minutes then pour into an 8-ounce mason jar with a lid.
Sauce will thicken more. Refrigerate up to 2 weeks.