Guaranteeing real-time performance for video encoding on platforms with limited resources is becoming increasingly important for consumer electronics applications. In this paper, an extension of an H.264/AVC encoder with complexity scalable motion estimation (ME) control is presented. An upper bound on the complexity of encoding a single frame is achieved by restricting Sum of Absolute Differences (SAD) computations performed during ME and trading complexity allocation per frame for output quality. Allocation based on residual, i.e. SAD distortion of the final ME match before quantization, of the co-located macroblock in the previous frame outperforms other approaches in the literature in video quality.