Can I use an encoder on my Spindle?

MASSO has provision for a spindle encoder in both Mill and Lathe software.
Lathe uses the spindle encoder for threading to ensure correct feed synchronization with the Z axis.
Mill uses the encoder to report the spindle RPM.
https://docs.masso.com.au/wiring-and-setup/setup-and-calibration/spindle-rpm-encoder

Can I use absolute or linear encoders on my axis?

MASSO does not support the use of absolute or linear encoders to determine the position.
This includes Glass scales or absolute position encodes built into motors.
Encoders are not used home the machine. Homing sensors or switches are required on each axis to home the machine.

The Encoder input on MASSO is used for spindle speed display on the MASSO F2 screen and for synchronization during threading operations in Lathe.
It cannot be used for motor positioning.
For more information please see https://docs.masso.com.au/wiring-and-setup/setup-and-calibration/spindle-rpm-encoder