Audio coding based on Frequency Domain Linear Prediction (FDLP) uses auto-regressive model to approximate Hilbert envelopes in frequency sub-bands for relatively long temporal segments. Although the basic technique achieves good quality of the reconstructed signal, there is a need for improving the coding efficiency. In this paper, we present a novel method for the application of temporal masking to reduce the bit-rate in a FDLP based codec. Temporal masking refers to the hearing phenomenon, where the exposure to a sound reduces response to following sounds for a certain period of time (up to $200$ ms). In the proposed version of the codec, a first order forward masking model of the human ear is implemented and informal listening experiments using additive white noise are performed to obtain the exact noise masking thresholds. Subsequently, this masking model is employed in encoding the sub-band FDLP carrier signal. Application of the temporal masking in the FDLP codec results in a bit-rate reduction of about $10$\% without degrading the quality. Performance evaluation is done with Perceptual Evaluation of Audio Quality (PEAQ) scores and with subjective listening tests.