Line an 8×8-inch square baking pan with parchment paper, leaving overhang on two opposite sides to form handles. Lightly spray the parchment with nonstick spray if your paper tends to stick.

In a medium saucepan, combine the white chocolate chips, sweetened condensed milk, and 4 tablespoons unsalted butter. Keep the vanilla extract and 1/4 teaspoon fine sea salt nearby to add after melting.

Stovetop: Place the saucepan over low to medium-low heat. Stir slowly but often until the mixture is completely melted, smooth, and glossy. Remove from heat and stir in the vanilla and 1/4 teaspoon fine sea salt. Microwave method: Add the white chocolate chips, sweetened condensed milk, and butter to a large microwave-safe bowl. Microwave in 20–30 second bursts, stirring well after each. When almost melted, switch to 10–15 second bursts and stir until fully smooth, then stir in the vanilla and salt.

Immediately pour the warm fudge mixture into the prepared pan. Use a spatula to spread it into an even layer, pushing it into the corners. Tap the pan lightly on the counter to release any air bubbles.

In a small saucepan, combine the unwrapped soft caramels, heavy cream, and 1 tablespoon unsalted butter. Heat over low heat, stirring often, until the caramels are fully melted and the sauce is smooth and shiny. Remove from heat and stir in 1/2 teaspoon fine sea salt. Taste carefully (it will be hot) and adjust salt to a pleasantly salty level. Microwave method: In a microwave-safe bowl, combine the caramels, cream, and butter. Microwave in 20–30 second bursts, stirring each time, until smooth, then stir in the salt.

Let the caramel cool for 2–3 minutes so it thickens slightly but remains pourable. Drizzle the warm salted caramel over the fudge base in thin ribbons. Use a butter knife or skewer to gently swirl the caramel through the top in small figure eights without fully mixing it in.

While the caramel is still a bit soft, sprinkle flaky sea salt evenly over the top. Start with a light sprinkle; you can always add more to individual pieces when serving.

Cover the pan lightly with foil or plastic wrap and refrigerate for at least 3 hours, or until the fudge is fully set. For the cleanest cuts, chill overnight. If you must cut early, give it at least 90 minutes in the fridge.

Use the parchment handles to lift the block of fudge out of the pan and onto a cutting board. Run a large, sharp knife under hot water, dry it, then cut the fudge into small squares (about 1–1.5 inches). Wipe and rewarm the knife as needed for neat edges.

Arrange the salted caramel fudge squares on a plate or in mini paper cups for gifting. For a stronger salty note, sprinkle a little extra flaky sea salt on individual pieces just before serving. Store leftovers at cool room temperature for up to 4 days, in the refrigerator for 2–3 weeks, or freeze for 2–3 months.