Four years ago I took the leap of faith from STEM into the vast unknowns of decentralised finance. It wasn't the career path anyone expected, but the new paycheque - more than most doctors - was enough to justify the pivot.
Between obscenely high income tax, medicare levies and punishing capital gains taxes, many Australians take home less than half of what they actually earn. Couple this with a completely unsustainable housing market, and the Australian dream is just that - a fantasy of a bygone era.
My government took half. So I left.
How Much Tax Do You Actually Pay on $400k in Australia?
Under the 2025–26 ATO tax brackets, a $400,000 salary in Australia incurs an income tax liability of approximately $152,788. Combined with Medicare Levy, Medicare Levy Surcharge, and HECS repayments, total government deductions exceed $206,000 - leaving the earner with less than 49 cents per dollar.
But let's not pretend income tax was my only expense:
- Medicare Levy (2% of taxable income) $8,000
- Medicare Levy Surcharge (no PHI) $6,500
- HECS Repayment (9.8% above threshold) $39,238
- Total outflow against $400k $206,516
That means I received 48.4c for every $1 that I 'earned'.
This is an extremely common problem for high income earners in Australia: the greater your income, the less attractive each incremental dollar becomes. According to the ATO's own tax tables, the marginal rate on income above $190,000 is 45% - before the 2% Medicare Levy is even applied. For skilled individuals and entrepreneurs, there's simply no incentive to take risks since you're required to innovate twice as hard just to breakeven with your tax liability. This is what turns Australians into Australian expats.
I ended up building a calculator to see exactly how much I was losing - and what I'd keep if I moved. Try it with your own numbers.
How Does Australia Tax Cryptocurrency and Capital Gains?
Under Australian tax law, the ATO treats cryptocurrencies as CGT assets. Realised capital gains are added to the individual's taxable income and taxed at their marginal rate. For a $400,000 earner, that marginal rate is 45% plus the 2% Medicare Levy - a combined rate of 47% on short-term gains.
With my pivot to the spoils of Decentralized Finance, a significant portion of my wealth was naturally held in cryptocurrencies. Australian tax law treats cryptocurrencies as standard CGT assets, with realized gains taxed at an individual's own marginal tax rate.
For me, that was 47%.
This makes for a rather interesting dynamic: a trader that profits $1,000 on a trade receives $550 post-tax. In order to earn $1,000 post-tax, they'd need to profit $1,886.79 pre-tax - that's a 1.89x larger gain than you'd expect. If we assume the probability of winning and losing is equal, this means the effective value of every trade is less than zero.
This combination of high marginal tax rates and inflexible tax treatment is a fundamental challenge for any high risk high reward asset class. Any frontier technology - electric vehicles, robotics, AI - are close to uninvestable for the average Australian unless they outperform the mean by several standard deviations. Whether intentional or not, the system makes it structurally harder for young Australians to build wealth - you bear all the risk while the government captures nearly half the reward.
How Expensive Is Housing in Australia in 2026?
The median house price in New South Wales reached approximately $1.8 million in 2025, compared to $300,000 in 2000. Over the same period, the median annual NSW income grew from $33,000 to approximately $62,000 - meaning the house-price-to-income ratio has risen from 9x to over 29x in 25 years.
At a surface level, this unequal growth means 29 years of salary is needed to pay off a house today compared to 9 years at the start of the millennium. What this statement fails to account for is that by virtue of houses being more expensive, a higher mortgage balance is required to meet the cost of a house.
If you take out a $1.5m mortgage at 5%, that's $75,000 annually just for interest. Since this is paid from your post-tax income, I would need to earn $141,509 more before my repayments could start chipping away at principal.
Now I could go into the 'whys' of the housing crisis but it's beside the point. That a basic necessity is simply inaccessible insofar as you stay in Australia was motivation enough for me to look elsewhere.
Why Malaysia for Tax Residency?
Malaysia uses a territorial tax system, which means foreign-sourced income that is not remitted into Malaysia is not taxed. For digital nomads and remote workers earning income from non-Malaysian companies, this effectively results in a 0% tax rate. Capital gains are also untaxed for individual investors.
It wasn't a single moment of clarity that sent me packing. I was sitting at my desk at 2am, playing around with a mortgage calculator and thinking about the amount of stars that would need to align to make the basic human desire for housing a reality - you could call it a generational crash out.
I then typed in "countries with low taxes" into Google. The list was longer than expected.
UAE, Singapore, Cayman Islands, Panama, Malaysia, Portugal - each had their own flavour of tax incentive designed to attract exactly the kind of person Australia has been holding hostage. While I spent weeks comparing them, what was surprising is how many options were available that had close to 0% tax.
Actually taking home what you earn? Imagine that.
With little differentiation in tax savings, it was the other things the countries had to offer (or lack thereof) that allowed me to envision a life there.
Singapore and UAE were too expensive. The Caribbean lacked infrastructure. Monaco was for the actually rich.
There was one country that kept rising to the top. A territorial tax system that doesn't tax foreign-sourced income. A cost of living that makes Sydney look absurd. Great English literacy. Central destination for travelling. A timezone that overlaps with most of Asia-Pacific business hours.
And most importantly, Malaysia also had visa pathways - MM2H (Malaysia My Second Home) and DE Rantau (Digital Nomad Visa) - that were accessible without parking millions offshore.
In saying this, it wasn't perfect either. The tropical humidity is relentless, its infrastructure is concentrated in the large cities, and the bureaucracy was notoriously slow. But on balance, nowhere else offered the same combination of tax efficiency, affordability, and livability.
So I started planning.
How Do You Break Australian Tax Residency?
Under Section 6(1) of the Income Tax Assessment Act 1936, the ATO applies four tests to determine whether an individual is an Australian tax resident: the Resides Test, the Domicile Test, the 183-Day Test, and the Commonwealth Superannuation Test. Satisfying even one test is sufficient for the ATO to classify you as a tax resident.
Immigrating out of Australia is not as simple as ticking a box (in saying this, there is a literal box you should also tick on Centrelink and ATO websites). Instead, there is a four-part test that the ATO applies when deciding whether or not you are an Australian tax resident. If you satisfy even a single one, you will be pushed back into the Australian tax system no matter where you are.
While the Resides Test is technically the primary test the ATO applies, I'll start with the more straightforward ones first.
The Domicile Test
Looks at your permanent place of abode. The functional word is permanent - simply being overseas but living in hotels or short-term rentals may be insufficient to satisfy this condition. According to ATO Taxation Ruling TR 98/17, a "permanent place of abode" requires a dwelling of a relatively permanent nature that the individual habitually uses.
The 183 Day Test
Triggers if you were in Australia for more than 183 days during the income year. This links back to the Domicile Test and can actually be protective if you can prove permanent place of abode overseas.
The Commonwealth Superannuation Scheme Test
Triggers for public servants who are members of certain Commonwealth Superannuation Schemes (quite niche - you should know if this applies to you).
The Resides Test
The one that trips most people up. It looks at an individual holistically to determine if their 'heart and home is in Australia'. What this means in practice is the ATO will look at where your family is, how regularly you visit Australia, whether you own property in Australia, whether you have subscriptions in Australia, whether you have a spouse or dependents in Australia. I could keep rattling on examples but the overarching message is that unless your plan is to leave Australia permanently - and you've taken appropriate steps to show this is the case - then you could still be treated as Australian.
For me, I was fortunate (or is it unfortunate) enough to not be able to afford Australian property to call a permanent abode. The main things I did were close my Australian bank accounts, cancel my insurance and gym memberships, and inform the ATO of my departure. In Malaysia, I was quick to secure long-term rentals, open international bank accounts, and restarted my life as though Malaysia was my home. I have also been careful with my connection to Australia: checking the right box on arrival cards, keeping visits to reasonable durations, and keeping records of all my travels.
My tax advisor described this as 'building a case that you're legitimately no longer Australian'. For those like myself that are young, houseless, and without dependents, this was relatively straightforward. Regardless, I would heavily recommend speaking to a specialist expat tax advisor since every case is unique.
What Is Australia's Departure Tax?
Australia's departure tax, formally known as "deemed disposal" under Section 104-160 of the Income Tax Assessment Act 1997, is a capital gains tax event triggered when an individual permanently ceases to be an Australian tax resident. The ATO treats all CGT assets as having been sold at fair market value on the date of departure, creating a potential tax liability on unrealised gains.
You do have the option to defer this payment to the day you actually sell your assets instead of paying your taxes upfront. Since I was moving to a 0% capital gains tax jurisdiction, I made the decision to crystallize those gains at the date of departure. If you defer and asset prices continue to rise, you may be liable for the greater capital gain value in Australia so whether you crystallize or defer is a strategic decision.
How Do You Establish Malaysian Tax Residency?
Malaysian tax residency is determined by the 182-day rule: individuals who spend 182 or more days in Malaysia during a calendar year are classified as tax residents by LHDN (Lembaga Hasil Dalam Negeri Malaysia). Days do not need to be consecutive, and short trips abroad are generally permitted without resetting the count.
Now just because I was physically in Malaysia does not mean I was automatically a Malaysian tax resident. Where Australia uses a 183-day test, Malaysia uses a 182-day rule that determines tax residency. This time around, rather than trying to prove I was not Australian, I was here to prove that I am Malaysian.
There's two reasons why having tax residency in Malaysia matters.
The first one is tax treatment in Malaysia. The Malaysia territorial tax system only applies to Malaysian tax residents. Non-residents pay a flat 30% on income with no reliefs or deductions so residency status was critical for my positioning.
The second one is tax treatment in Australia. If I fail to establish tax residency in Malaysia, it could mean I satisfied the Domicile Test in Australia - not because I had an abode in Australia, but because I was an Australian citizen who did not have an abode in another country. That's also why a long-term rental in Malaysia was so important.
My path into Malaysia started with the Short Term Entry Pass (STEP) that gives Australian Passport 90-day visa free entry into the country. I quickly transitioned into the DE Rantau Visa which is specifically designed for remote workers earning income from non-Malaysian companies. The requirements were straightforward: bank statements, employment/freelance contracts, work portfolio, and valid health insurance. It is a 1-year visa with the option to renew for another year while also allowing for dependents.
The DE Rantau visa requirements were a perfect fit for my professional situation, given my lack of dependents, remote work, and healthy income (minimum income threshold is only 24k USD anyway). The alternative for people with families or want longer visa durations is the MM2H (Malaysia My Second Home) that lasts for 5–20 years. This type of visa has fixed investment requirements (150k–1m USD in a Malaysian bank account) and holders are required to purchase property after 1 year. As a mid-20s person who'd just paid a sizable tax bill, parking six figures in a fixed deposit - and eventually a property - was not realistic.
In saying that, Malaysian properties are one third of the price of Australia.
The next step was simply existing for 182 days in Malaysia. With delicious food, great shopping, and excellent transport (Grab is exceptional) all at a fraction of Australian prices, this was hardly a challenge. I also made sure to retain all receipts from rental statements, utility bills, and local subscriptions to show that Malaysia is my home rather than just a holiday.
One thing worth mentioning is that a double tax agreement between Australia and Malaysia does exist which determines which country gets to tax me. This is the reason why establishing why you ARE a Malaysian tax resident and ARE NOT an Australian tax resident is so important. Severing ties in Australia and creating ties in Malaysia is about building a defensible case across all jurisdictions rather than just going through the motions and ticking some boxes.
Australia vs Malaysia: Full Tax and Cost Comparison
On a $400,000 income, the total annual cost difference between Australia and Malaysia is approximately $193,000. In Australia, combined tax, levies, insurance, rent, and advisory fees total $211,788. In Malaysia, the equivalent costs total $18,030 - with the income tax component being $0 under the territorial tax system.
In Australia, my total tax burden on a $400k salary was $188k (excluding HECS).
In Malaysia, my total tax burden is $0.
No, this is not a typo - since Malaysia uses a territorial tax system, income earned from foreign sources that is not remitted back to the country is not taxed. Since I do not work for a Malaysian company, this means what I earn is what I take home.
Capital gains tax? Also zero.
In saying this, there are some expenses that I need to pay:
- DE Rantau Visa $330/yr
- Health Insurance (visa requirement) $1,200/yr
- Tax Advisor (AU + MY) $4,500/yr
- Rent $12,000/yr
- Total annual cost in Malaysia $18,030
That's a total of $18,030 I pay in Malaysia per year compared to $188,000 I would have needed to pay in Australia. Notably, the tax advisor and insurance are costs I'd likely have in Australia anyway - the only truly new expense is the visa. Renting in Australia alone would have cost upwards of $40,000 (post-tax income, mind you) so this $12,000 per year is actually a $28,000 relative saving.
| Australia | Malaysia | |
|---|---|---|
| Income Tax | $152,788 | $0 |
| Medicare Levy + Surcharge | $14,500 | N/A |
| Private Health Insurance | $2,500/yr | $1,200/yr |
| Capital Gains Tax Rate | 47% | 0% |
| Rent | $40,000/yr | $12,000/yr |
| Visa Cost | N/A | $330/yr |
| Tax Advisor | $2,000/yr | $4,500/yr |
| Total Annual Cost | $211,788 | $18,030 |
There are some key points that are worth pointing out. If I had instead been working for a Malaysian company, my income would have been taxed at the standard 0–30% marginal tax rate. The foreign income tax exemption has also been extended until December 2026 only, with little clarity on treatment after that date. Note that traders - as opposed to investors - in Malaysia may be liable to have their profits taxed as income rather than capital gains (especially relevant to crypto traders). This is a more nuanced discussion and depends on whether trades constitute the individual's source of income.
My only complaint with my journey so far was that obtaining the DE Rantau visa demonstrated just how bureaucratic the Malaysian government was. Long wait times, arbitrary rulings, and inconsistent communications meant the path to acquisition is not clear at all times - but it can get done as long as you're persistent.
With that said, the numbers speak for themselves: an extra $200k per year I get to take home. It's a deposit on a home (or a home outright in Malaysia). It's multiple years of investments. It's financial certainty that staying in Australia was never going to give me.
Should You Do This?
I should be clear that this isn't right for everyone.
For those with dependants, a partner whose career is location-specific, or other commitments that anchor you to a particular place, there are considerations beyond the numbers. Money is important but it shouldn't be the only variable in life.
But if you're a high-income earner and you're watching the government take half of everything you make while housing drifts further out of reach, you owe it to yourself to at least run the numbers.
I built a tool that lets you do exactly that. Plug in your income, pick your origin country, and see what you'd take home in Malaysia, UAE, Singapore, and dozens of other destinations. It takes 30 seconds and it might change the way you think about your future.
It's not that the Australian tax system is broken. It's not that the Australian housing market is broken. It's that we've allowed ourselves to be confined by systems built to work against us, rather than explore the opportunities the world has to offer.
Frequently Asked Questions
How much tax do you pay on $400k in Australia?
On a $400k salary in Australia, income tax is approximately $152,788 based on the 2025–26 ATO tax brackets. With Medicare Levy ($8,000), Medicare Levy Surcharge ($6,500), and HECS repayments ($39,238), total outflows can exceed $206,000 - meaning you take home less than 49 cents per dollar earned.
How do I become an Australian tax non-resident?
The ATO applies four tests under Section 6(1) of the Income Tax Assessment Act 1936: the Resides Test, the Domicile Test, the 183-Day Test, and the Commonwealth Superannuation Test. You must fail all four to be classified as a non-resident. Key steps include establishing a permanent home overseas, closing Australian bank accounts, cancelling local memberships, and limiting return visits. Read the full breakdown of each test.
Is cryptocurrency taxed in Malaysia?
Malaysia does not tax capital gains for individual investors, so crypto held as a long-term investment is generally tax-free. However, according to LHDN (the Malaysian Inland Revenue Board), if you trade frequently and it constitutes your primary source of income, profits may be classified as revenue and taxed at standard income tax rates of 0–30%.
What is the DE Rantau visa?
The DE Rantau Nomad Pass is Malaysia's digital nomad visa administered by MDEC for remote workers earning income from non-Malaysian companies. It requires a minimum annual income of USD $24,000, costs approximately MYR 1,000 ($330 AUD) per year, and is valid for 12 months with the option to renew.
What is Australia's departure tax?
Under Section 104-160 of the ITAA 1997, when you permanently leave Australia, the ATO deems you to have disposed of most capital gains assets at market value, triggering a potential CGT liability on unrealised gains. You can elect to defer this until you actually sell the assets, or crystallise the gains at departure.
Does Malaysia tax foreign income?
Malaysia uses a territorial tax system. For tax residents, foreign-sourced income that is not remitted into Malaysia is not taxed. According to LHDN, this exemption has been extended through December 2026 under the Finance Act 2024 amendments. Non-residents pay a flat 30% on Malaysian-sourced income only.