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Frequency Domain Linear Prediction (FDLP) gives an approximation of the Hilbert envelopes of a signal. FDLP based Codec works with long temporal segments and keeps the information carried by the time-domain envelopes very well. The codec gives good quality of the reconstructed signal, but coding efficiency is not enough. Here Frequency masking is introduced to FDLP based codec to reduce the bit-rate. Frequency masking is a hearing phenomenon that the hearing threshold of a sound will increase if an intense sound exists simultaneously. The psychoacoustics model is used to estimate the hearing threshold and the absolute threshold of hearing (ATH) of the FDLP carrier signals, and bit allocation for frequency sub-bands FDLP carrier signal is calculated according to the threshold and ATH. 5% bit-rate reduction is obtained with the application of the frequency masking. Perceptual Evaluation of Audio Quality (PEAQ) and Multiple Stimuli with Hidden Reference and Anchor (MUSHRA) test are carried out to evaluate the performance.