01 - Preheat oven to 350°F. Grease and flour two 9-inch round cake pans and line bottoms with parchment paper.
02 - Whisk together flour, baking powder, and salt in a medium bowl until evenly blended.
03 - Beat butter and sugar with electric mixer on medium-high speed until light and fluffy, approximately 3 minutes.
04 - Add eggs one at a time, beating thoroughly after each addition. Mix in vanilla extract until incorporated.
05 - Alternately add flour mixture and milk to butter mixture, beginning and ending with flour. Mix until just combined, taking care not to overmix.
06 - Gently fold rainbow sprinkles into batter using a spatula, incorporating evenly without overmixing.
07 - Divide batter evenly between prepared pans. Smooth tops and bake for 25-30 minutes until toothpick inserted in center comes out clean.
08 - Let layers cool in pans for 10 minutes, then invert onto wire racks to cool completely before frosting.
09 - Beat butter until creamy. Gradually add powdered sugar, milk, vanilla, and salt. Continue beating until frosting becomes light, fluffy, and spreadable.
10 - Frost top of one completely cooled layer. Place second layer on top and cover entire cake with remaining frosting. Decorate generously with extra sprinkles.