This Caramel Simple Syrup is perfect for adding to iced coffee and you only need 3 ingredients: sugar, water and vanilla extract.

Caramel syrup with iced coffee on the side

I don't know about you, but it's hard to replicate that coffee shop caramel syrup flavour, and the store bought ones just don't hit the same. That's why I'm excited to share the most PERFECT caramel-y flavoured syrup that is SO much easier to make than you think.

Why you'll love this recipe

Simple syrup texture: It's easily added to iced drinks (instead of thicker syrups that don't blend well)
No artificial flavors or preservatives: Unlike store-bought syrups, this homemade version is made with just a few simple ingredients you can actually pronounce.
Customizable and portion-controlled: You control the sweetness and ingredients, so it's easy to align with your dietary goals, whether you're watching sugar intake or avoiding processed foods.

Ingredients and substitutions

White Sugar – Coconut Sugar or Maple Sugar
For a less refined and healthier option, use coconut sugar or maple syrup. Note: this will make the syrup darker and give it a deeper, more molasses-like flavor.
White Sugar – Monk Fruit Sweetener or Allulose (for sugar-free)
Use a 1:1 monk fruit erythritol blend or allulose for a low-calorie, sugar-free version. Allulose is especially good because it caramelizes similarly to real sugar. Keep in mind that some sugar substitutes may not brown as well or may need slightly different cooking times.
Vanilla Extract – Maple Extract, Almond Extract (for a twist), or leave out altogether
If you're out of vanilla or want to switch things up, maple or almond extract both give a unique flavor that complements the caramel notes. You can also just leave it out.

How to make caramel syrup

Collage of sugar and water in a saucepan and the mixture on the stove

Step 1: Heat sugar and water.

Stir in a saucepan until fully dissolved.

Step 2: Bring to a boil.

Cook for 15-20 minutes.

Collage of caramel syrup boiling, and kettle boiling more water

Step 3: Boil until golden.

Make sure it smells caramelized and it turns thick

Step 4: Boil water in a kettle.

Get boiling water ready.

Collage of whisking the caramel syrup once boiling water is added and adding vanilla extract after

Step 5: Add boiling water.

Use oven mitts because it will splatter.

Step 6: Add vanilla.

Stir in the extract.

Collage of syrup in saucepan and syrup in mason jar.

Step 7: Let cool.

Let it cool in the saucepan for 30 minutes.

Step 8: Store in fridge.

Store it in a mason jar or a fancy jar I've linked at the end of this blog post.

Tips and variations

Making caramel syrup can be a little tricky. Here are some tips to get it perfect every time.

Watch closely while boiling: Once the syrup starts to color, it can go from golden to burnt fast—don’t walk away!
Use a light-colored pan: It’s easier to see the color change if your saucepan isn’t dark.
Wear oven mitts when adding hot water: The mixture can splatter, so protect your hands and whisk carefully.
Whisk vigorously: Make sure you're whisking it the second you add the boiling water so it doesn't harden.

Wanna switch it up? Add in the following flavours for a twist:

Salted Caramel: Add a pinch of sea salt after stirring in the vanilla. You can also add half the mixture to a jar, then the other half to another jar and add the salt so you have caramel AND salted caramel syrup.
Spiced: Add a dash of cinnamon, nutmeg, or pumpkin spice to the finished syrup.
Vanilla-Free: Skip the vanilla for a more classic caramel flavor.
Coconut: Add 1 tsp coconut extract for coconut caramel flavor.

Frequently asked questions

What's the difference between caramel syrup and caramel sauce?

Caramel syrup is typically made from sugar and water, resulting in a thinner, simple syrup-like consistency that is ideal for mixing into iced drinks like iced coffee. Caramel sauce, on the other hand, includes additional ingredients such as butter and cream, giving it a richer flavor and thicker texture, making it best for drizzling over desserts.

Why did my caramel syrup crystallize, and how can I fix it?

Crystallization can occur and the mixture can become too thick if you stir it too much once the sugar has dissolved. You can also try adding corn syrup to prevent this. If crystallization has already occurred, you can just add a bit of water, stirring until it's less thick. Finish as usual with the boiling water.

What else can I use caramel syrup for besides iced coffee?

Drizzle over pancakes, waffles, or French toast.
Stir into oatmeal or over yogurt and granola with berries for added sweetness.
Use as a topping for ice cream or desserts.
Mix into iced lattes, cocktails or milkshakes for a caramel flavor.

How can I tell if my caramel syrup has gone bad?

It should last for 1 month in the fridge since it's basically just water and sugar, but be on the lookout for changes in texture (like becoming overly thick or crystallized), discoloration, mold growth, a bad smell or an unpleasant taste.

Caramel syrup in a glass jar with a label

How should I store homemade caramel syrup?

Allow the syrup to cool completely or at least for 30 minutes, then transfer it to the fridge. It can be stored at room temperature for 2-3 days, but I recommend refrigerating so it lasts up to 1 month.

Can I freeze caramel syrup?

Yes, you can actually freeze caramel syrup! Pour it into a freezer-safe container like a small mason jar, leaving some space at the top to accommodate expansion. When ready to use, thaw it in the refrigerator overnight.

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What you need to make this recipe

Get some cute coffee syrup dispensers to encourage you to drink more iced coffee at home.