Designing Kitchens and Bathrooms - Ceramic tile installation on a bathtub surround

Is it common to have a quarter inch gap all the way around the perimeter of the back wall.

I am mainly wondering if tile is to be against the ceiling or is it supposed to stop a quarter inch from the ceiling and filled with grout.

How you make that transition is up to you. If you leave a gap between the tile and the ceiling, caulk it, dont grout it. You could actually stop the tile just above the shower head if you wanted to and just paint up above. This gives you more flexibility as to where your top row of tile will end without having to consider and plan for the ceiling. If you go this route, cement board up to where you intend to stop the tile and drywall above.:)

Thanks for posting,

I installed hardy backer all the way to the ceiling with the intention of putting tiles on the full wall. I just didn't know what the common practice is for the final tile row. (I don't want it to look weird or abnomal compared to commmon practices)

Leave a gap of approx 1/8" between the top tile and the ceiling and caulk the joint. Plan so that you have at least a half tile or more at the ceiling line. This way if the joint around the ceiling is not level it wont be noticable.:)