Gather all ingredients and line a 9x9 inch baking dish with parchment paper.

Spread 1 cup of chopped pecans or nut substitute evenly across the bottom of the dish.

In a medium-sized pot, combine the butter, granulated sugar, water, and salt over medium heat. Stir until melted and bubbling.

Once bubbling steadily, attach a candy thermometer and stir until it reaches 300°F (hard crack stage).

Remove from heat and stir in the vanilla extract.

Quickly pour the hot caramel over the nuts in the dish, spreading it evenly.

Allow caramel to cool for 2 minutes, then sprinkle chocolate chips over the surface.

Cover tightly with foil for about 4 minutes to help melt the chocolate.

After 4 minutes, gently swirl the melted chocolate into a smooth layer.

Let the toffee cool completely for about 4 hours at room temperature.

Once set, lift the toffee out of the pan and cut into pieces.