Are Scholarships Taxable in Canada? 2025 Guide

The rules on when scholarship and bursary income is tax-free for Canadian students.

The short answer: most scholarships and bursaries received by full-time Canadian students are completely tax-free. But the details matter — graduate fellowships, prize money, and certain research stipends are treated differently. This guide explains the rules clearly so you know exactly what to report (and what you don't need to).

The General Rule: Scholarships Are Mostly Tax-Free

Full-time students: Scholarship income received in connection with full-time enrollment at a designated educational institution is generally exempt from tax. This includes scholarships, bursaries, fellowships, and most academic prizes.

Part-time students: Exempt up to the amount of eligible tuition and fees paid for the year.

Types of Awards and Their Tax Treatment

Award Type	Taxable?	Notes
Scholarship (undergraduate)	No (full-time)	Fully exempt for full-time students
Bursary (need-based)	No (full-time)	Fully exempt for full-time students
Academic prize / award	No (full-time)	Exempt if received for academic achievement
Graduate fellowship	Partially	See graduate section below
Research grant (working)	Yes	Treated as employment or research income
Athletic award	Conditional	Generally exempt if through designated institution
Prize money (competition)	Often yes	Not connected to enrollment — may be taxable

How Awards Are Reported: The T4A

Your school or award provider issues a T4A (Statement of Pension, Retirement, Annuity, and Other Income) for scholarships and awards. Box 105 on the T4A shows scholarship, bursary, and fellowship income. Even if the amount is tax-exempt, it still appears on your T4A and must be entered on your tax return — you then apply the exemption.

In Wealthsimple Tax or TurboTax, when you enter T4A Box 105, the software asks whether you were a full-time or part-time student to determine how much is exempt.

Graduate Students: Fellowships and Research Stipends

Graduate students often receive funding from multiple sources, and the tax treatment differs:

Tax-Free Graduate Funding

Fellowship income received in connection with your graduate program (not in exchange for services) is generally exempt for full-time grad students
SSHRC, NSERC, and CIHR scholarship/fellowship payments are generally tax-free for students enrolled full-time in a graduate program

Potentially Taxable Graduate Funding

Research grants where you perform services — If your fellowship requires you to perform specific research activities for the professor (essentially employment), a portion may be taxable as employment income
Teaching assistant (TA) income — Always taxable. You receive a T4 for TA work.
Research assistant (RA) income — Usually taxable employment income. T4 is issued.

SSHRC, NSERC, CIHR Awards: Tax Treatment

Federal graduate scholarships from the three major Canadian research councils are generally not taxable for students enrolled full-time in a graduate program:

SSHRC (Social Sciences and Humanities Research Council) — CGS-M, CGS-D, Vanier awards are tax-exempt for full-time students
NSERC (Natural Sciences and Engineering Research Council) — CGS and PGS awards are tax-exempt for full-time students
CIHR (Canadian Institutes of Health Research) — Fellowship and scholarship awards are tax-exempt for full-time students

However, if the award comes with specific service requirements that go beyond normal graduate study, consult CRA or a tax professional.

Part-Time Students: How Much Is Exempt?

For part-time students, the scholarship exemption is limited to the total amount of eligible tuition and fees paid for the year. For example:

You're a part-time student and paid $2,500 in tuition
You received a $4,000 scholarship
Exempt amount: $2,500 (equal to tuition paid)
Taxable amount: $4,000 − $2,500 = $1,500

Olympic and Athletic Awards

Athletes who receive payments from the Canadian Olympic Committee, national sport organizations, or similar bodies may have tax-free awards if the payment qualifies under the athletic exemption. Payments for being "on the team" or competing are generally exempt, while employment-type arrangements may not be.

When to Consult a Professional: If you receive significant graduate funding (over $25,000/year), have a mix of fellowship and employment income, or are unsure whether your award is tax-exempt, consult a tax professional or your university's financial aid office.

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Bottom Line

For most undergraduate Canadian students enrolled full-time, scholarships, bursaries, and academic awards are completely tax-free. You must still report them on your T4A, but you apply the exemption on your return. Graduate students need to be more careful — distinguish between fellowship income (usually exempt) and employment-type RA/TA income (always taxable). When in doubt, enter the T4A and let your tax software guide you through the exemption.