Subway tile installation
Hopefully the counter top and the level line will be parallel, as well as the botom of the upper cabinets. If not, you will have to cheat the tile layout to make it as pleasing visually as you can. Tweaking this is time well spent. If the counter is level, use 1/8" spacers to hold a caulking gap between the tile and counter top , 1/4'" is too big to caulk neatly IMO. If they are not level, have an assortment of shims available to maintain the tiles to your determined layout. Once the wall tiles have set, remove the shims and grout. Clean out any grout from the tile,/countertop joint, as grout will not last in this joint. When you buy your grout, get a tube of color matched caulking to use here; when it dries, it will look exactly like the rest of the grout. Anything will work to cover the counter top, cardboard, a couple layers of newspaper, visqueen.