If a party consists of more than one character, the experience points (XPs) awarded for killing creatures are reduced. The larger the party, the greater the reduction. When the opponent creature dies, all party members present, whether player character or associate, count towards the party size when determining this reduction. (This is applied independently of any multiclass penalty.)

Some view this reduction as a penalty, as it hurts players who make use of certain class abilities, which should already be factored into a PC's effective character level, hence already counted before considering party size. In other situations, though, this reduction reflects the greater power of the party and is consistent with the way XP rewards are reduced for a given creature as a character advances in level. Under either interpretation, the net change in levels earned over the course of an adventure is often not much, since the standard encounter system also uses party size, in that case to spawn more creatures for a larger party. Thus the reduced XP per creature is balanced to some extent by the presence of more creatures. Over the course of the original campaign, the use of companions appears to typically result in one less level earned when compared to players who never use companions.

The exact mechanics of the reduction appear to be that the normal XP for a creature kill is multiplied by 4, then divided by 3 more than the party size. Thus a solo character has unchanged XP (multiplied and divided by 4), whereas a PC with a summoned familiar earns 80% XP from kills (4/(4+1) equals 0.8).

XP adjustments for party size
Party size Companions Fraction of XP Percentage
1 0 4/4 100%
2 1 4/5 80%
3 2 4/6 67%
4 3 4/7 57%
5 4 4/8 50%
6 5 4/9 44%
7 6 4/10 40%
8 7 4/11 36%
9 8 4/12 33%
10 9 4/13 31%
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