Systems and methods (“utility”) for encoding digital linear image data into encoded image data. The utility may be included as part of a digital image capture device, such as a digital camera or a film scanner. The utility may include an encoder module that is operative to encode digital linear image data into encoded data according to an enhanced transfer function. The transfer function includes a linear portion and a logarithmic portion separated by a breakpoint. The transfer function may be continuous and continuously differentiable at the breakpoint. Further, the transfer function may operate to reduce the bit depth of the image data (e.g., from 12 bits to 10 bits, or the like) to provide compression for the image data.