Preheat the oven to 350°F (175°C). Grease and flour three 9-inch round cake pans.
In a large bowl, cream together butter and sugar until light and fluffy. Add eggs and vanilla, beating well.
In a separate bowl, whisk together flour, baking powder, and salt. Gradually add dry ingredients to the wet mixture, alternating with milk. Stir in 1 cup of caramel sauce.
Divide batter among prepared pans and bake for 25-30 minutes or until a toothpick comes out clean. Allow cakes to cool completely on a rack.
For the frosting, beat butter, powdered sugar, and caramel sauce until smooth. Add a pinch of salt for balance.
Frost each cake layer generously, stacking them on top of each other.
Drizzle additional caramel sauce over the top for a decadent finish.
Slice and indulge in the rich, moist, and caramel-infused goodness of your homemade caramel cake!