Tax and Your Scholarship

Scholarships, bursaries or other educational allowances are exempt from PAYG withholding and personal income tax where payment is:

• made to a student receiving full time education. ie. undertaking a
  full-time course.
• not received ‘on the condition’ that they become, or continue to be, an
  employee of UWA or enter into, or continue to be, a party to a contract for labour with UWA.
• principally for educational purposes.
• paid by a school, college or university.
• does not have any requirement attached that amounts to the student
  having to render services.

There also must not be a condition that the student "will" render or "continue" to render services. Furthermore, the mere fact that a scholarship holder has to lodge an annual progress report to the scholarship provider also does not constitute a requirement to render services.

If you are not sure whether your scholarship is taxable, please visit the Australian Taxation Office (ATO) website for more information.