ByteDance, the parent company of TikTok and Douyin, will end the Lunar New Year tradition of giving red packets to employees from 2026, but will expand medical insurance for staff, according to an internal letter sent to employees on Friday and seen by the South China Morning Post.
The change is meant to sort out differences between "incentives" and "welfare", according to the letter.
The red packet, or "lucky money", tradition started in 2017 and became a universal perk for all ByteDance employees. The Beijing-based company will still issue them this year, in amounts ranging from hundreds to thousands of yuan for each employee based on tenure.
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ByteDance did not immediately respond to a request for comment.
Meanwhile, the company has introduced measures to increase incentives for high-performance employees, with year-end bonuses that may include both cash and stock options, as outlined in a separate incentive plan released in January 2024.
The Douyin logo, the Chinese counterpart of TikTok, seen on a ByteDance office building in Beijing, January 18, 2025. Photo: EPA-EFE alt=The Douyin logo, the Chinese counterpart of TikTok, seen on a ByteDance office building in Beijing, January 18, 2025. Photo: EPA-EFE>
The new benefits package includes improved medical insurance, with access to premium medical care in regular public hospitals, as well as higher reimbursement rates and better dental care, including 300 yuan (US$40) for teeth cleaning. Staff can also get free flu vaccinations for their children.
It adds benefits to the previous package that covered basic dental insurance and child medical insurance.
The new ByteDance benefits also include partial coverage for external gym memberships, and a shift towards offering healthier snacks - such as nuts, fruit and yogurt - depending on the location of the office.
Regarding festive gifts, the company will continue its tradition of offering gift boxes for employee anniversaries and the Lunar New Year but will stop handing out gifts for the Dragon Boat and Mid-Autumn festivals. The 2025 Lunar New Year gift box, sent out in December, included items like a calendar and an Insta360 Flow Pro smartphone stabiliser.
China's tech industry, once driven by high salaries, has been adjusting compensation strategies amid slowing growth. Human resources experts and several ByteDance employees told the Post that the enhanced medical insurance benefits are far more practical and valued than the gift boxes.