01 - Preheat oven to 350°F. Grease and flour two 9-inch round cake pans, lining bottoms with parchment paper.
02 - Whisk together flour, baking powder, and salt in a medium bowl until evenly distributed.
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.
05 - Alternate adding flour mixture and milk to butter mixture, starting and ending with flour. Mix until just incorporated.
06 - Gently fold rainbow sprinkles into batter using spatula, taking care not to overmix.
07 - Divide batter evenly between prepared pans. Smooth tops and bake for 25-30 minutes until toothpick inserted in center emerges 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 incorporate powdered sugar, milk, vanilla, and salt, beating until light, fluffy, and spreadable.
10 - Frost top of one cooled layer, position second layer atop, then cover entire cake with remaining frosting. Garnish with additional sprinkles.