The present invention provides an apparatus, method and tangible medium storing instructions for determining tonality of an input audio signal, for selection of corresponding masked thresholds for use in perceptual audio coding. In the various embodiments, the input audio signal is sampled and transformed using a compressed spectral operation to form a compressed spectral representation, such as a cepstral representation. A peak magnitude and an average magnitude of the compressed spectral representation are determined. Depending upon the ratio of peak-to-average magnitudes, a masked threshold is selected having a corresponding degree of tonality, and is used to determine a plurality of quantization levels and a plurality of bit allocations to perceptually encode the input audio signal with a distortion spectrum beneath a level of just noticeable distortion (JND). The invention also includes other methods and variations for selecting substantially tone-like or substantially noise-like masked thresholds for perceptual encoding of the input audio signal.
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