Updated: April 2025  |  bremo.io financial guides

Canada Scholarship Tax Rules 2025

For most full-time Canadian students, scholarships are completely tax-free. Understanding the rules prevents surprise tax bills and ensures you report correctly on your T1 return.

Full-Time Scholarship Exemption

If you are enrolled full-time at a qualifying post-secondary institution, all scholarship, fellowship, and bursary income you receive is 100% exempt from tax — no ceiling. A full-time PhD student receiving a $60,000 NSERC fellowship owes no tax on that amount. The exemption requires enrollment to qualify.

Part-Time Rules

Part-time students exempt scholarship income only up to their qualifying educational expenses for the year (tuition, books, course supplies). If your scholarship is $5,000 and your educational expenses are $3,000, the $3,000 is exempt and $2,000 is taxable. Track expenses carefully if you are part-time and receive scholarships.

T4A Reporting

Schools and granting agencies report scholarship/bursary amounts on T4A slips (Box 105). These appear automatically in CRA My Account. You must report Box 105 on Line 13010 of your T1 return — then claim the exemption on Schedule 11 to reduce the taxable amount to zero (for full-time students). Never ignore a T4A even if the income is fully exempt.

Research Grants

Research grants have different treatment. The net research grant income (grant minus eligible research expenses) is included in your income. Keep records of all research-related expenses: equipment, travel, materials, and other costs directly related to the research funded by the grant.

Graduate Funding (NSERC, SSHRC, CIHR)

Graduate students funded through major federal councils receive T4As for fellowship amounts. If enrolled full-time in a recognized graduate program, the full exemption applies regardless of whether the funding comes from the supervisor's grant, the university, or a federal agency.

Employer Scholarships

Scholarships paid to employees' children by employers are generally treated as taxable employment benefits to the employee — not the student — unless paid through a structured merit-based program at arm's length from the employment relationship.