drywall above Tub Surround

Hi
I am putting in a new bath tub and I removed the old tub and drywall and I am installing a new tub and tub liner.
I am using the water resistant drywall.
My question is, can the tub liner end just above the shower head or does it need to extend to the ceiling.

Thanks
Craig


PS. I never knew till yesterday that my old tub was cast iron, what a pain it was to remove.