Tokyo is the world’s most expensive city for expatriates, pushing Luanda, Angola, down to second position, according to Mercer’s 2012 Cost of Living Survey. The survey covers 214 cities on six continents and measures the comparative cost of more than 200 items, including housing, transportation, food, clothing, household goods and entertainment. Mercer’s survey, the world’s most comprehensive, helps multinational companies and governments determine compensation allowances for their expatriate employees.

Nathalie Constantin-Métral, the Mercer Principal responsible for compiling the ranking each year, says, “Deploying expatriate employees is becoming an increasingly important aspect of multinational companies’ business strategy, including expansion. But with volatile markets and stunted economic growth in many parts of the world, a keen eye on cost efficiency is essential, including on expatriate remuneration packages.

“Making sure salaries adequately reflect the difference in cost of living to the employee’s home country is important in order to attract and retain the right talent where companies need them,” she adds.

See which cities rank highest and lowest for cost of living.

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For more information about this survey, visit www.imercer.com/col.