The 25-year-old is currently tied down until June 2024, however the Whites are keen to extend his deal as soon as possible to fend off any potential interest from bigger clubs.
According to Eurosport, talks between both parties have hit a stumbling block and Leeds have been advised by Phillips' representatives to improve their offer.
Phillips is currently earning around £35,000 a week, but is believed to be holding out for a salary worth around £100,000 per week, which would make him the club's highest earner, surpassing the likes of Patrick Bamford and Raphinha.
However, the report adds that the Yorkshireman's hesitancy to sign a new deal is not entirely down to money, as he is yet to be convinced by the club's ambitions going forward.
Phillips is happy playing for his boyhood club, but he wants reassurances that they can remain competitive as a Premier League outfit.
The England international has made 219 appearances across all competitions for Leeds, scoring 14 goals and providing 12 assists. body check tags ::