The England fullback's current deal expires in June and he is a Bosman target for Real Madrid.
The Sun says Liverpool have offered an improvement of £70,000-a-week more than the £180,000-a-week he currently receives, for a total of £250,000-a-week.
But Alexander-Arnold is demanding more. Liverpool's proposal does not meet the requirements of the player, whose desire is to reach £350,000-a-week.
With Real monitoring developments, the fullback is insisting his wages be brought to the level of the club's highest paid players like Virgil van Dijk and Mohamed Salah, who are also off contract this summer.
It's been suggested Real are already in talks with Alexander-Arnold's camp about a move to Madrid at the end of the season.
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