Firms offer compensation not only through wages, but also offer transport-related fringe benefits such as transport benefits (company cars, travel, and parking benefits) and relocation benefits to job applicants. We argue that these benefits are not randomly offered to employees, but depend on the job applicants' commuting costs. The firms' choice between these benefits affects the workers' incentive to move their residence closer to the workplace. Using information on firms' recruitment behavior in the United Kingdom, this paper shows empirically that the applicants' journey-to-work time induces firms to offer these benefits to job applicants. The implications of transport-related fringe benefits for commuting and relocation are found to be rather distinct. Transport benefits make employees less sensitive to the costs of commuting, whereas relocation benefits induce employees to move closer to the workplace. © Blackwell Publishing, Inc. 2006.