An image encoding method includes at least following steps: receiving a plurality of target pixels within a frame, wherein pixel data of each target pixel has at least one color channel data corresponding to at least one color channel; determining a bit budget of the target pixels; and performing bit-plane scanning coding upon selected pixels according to the bit budget and a scanning order, and accordingly generating encoded pixel data of the selected pixels as encoded data of the target pixels, wherein the selected pixels are derived from the target pixels, and the bit-plane scanning coding extracts partial bits of pixel data of each selected pixel as encoded pixel data of the selected pixel. In addition, a corresponding image decoding method is provided.