In a heavy-bottomed saucepan, combine 1 cup packed brown sugar, 1/2 cup cubed salted butter, and 1/4 cup whole milk.

Place the saucepan over low heat and stir gently. You need patience to avoid a grainy texture. Once the butter has fully melted, continue stirring for about 1 minute.

Increase the heat to medium and allow to come to a gentle boil. From this point, do not stir. Let it cook until it reaches 230°F on a candy thermometer (3 to 6 minutes).

Remove the saucepan from the heat and pour the caramel into a bowl. Let it cool to room temperature. It will thicken and may appear a bit grainy, it is perfectly fine.

Once cooled, transfer the caramel to a large mixing bowl. Add 2 1/2 cups of sifted powdered sugar gradually, mixing until the frosting is smooth. If you're adding vanilla extract, mix it in now.