A scalable audio codec for a processing device determines first and second bit allocations for each frame of input audio. First bits are allocated for a first frequency band, and second bits are allocated for a second frequency band. The allocations are made on a frame-by-frame basis based on the energy ratio between the two bands. For each frame, the codec transform codes both frequency bands into two sets of transform coefficients, which are then packetized based on the bit allocations. The packets are then transmitted with the processing device. Additionally, the frequency regions of the transform coefficients can be arranged in order of importance determined by power levels and perceptual modeling. Should bit stripping occur, the decoder at a receiving device can produce audio of suitable quality given that bits have been allocated between the bands and the regions of transform coefficients have been ordered by importance.