Experience points (XP) have been a classic reward and measure of improvement. As a way of measuring your character’s actual life experience, the original system is needlessly complex, requiring substantial bookkeeping, and failing to reward the experience gained from failing to defeat the monster. Sometimes a tactical withdrawal is the most valuable experience of all.
Regarding XP as a reward, there are many ways to reward players and their characters, such as coin and equipment, titles and prestige, and boons such as action points. Having player characters of varying level may add realism, but it reduces the fun of the player with the less effective character. I prefer to not focus on a reward system that makes anyone’s character less fun to play.
Therefore, the XP system will be simplified as follows and the group will gain XP as a whole with each character’s level being equal. The GM will continue to give out XP between sessions. Each level-appropriate encounter will be worth 1 XP. Easier encounters (2-3 CR levels below the party level) are worth ½ XP, whereas challenging encounters (2-3 levels above the party level) are worth 2 XP. Truly epic encounters may be worth more XP at the GM’s discretion.
Per the core rulebook, the challenge rating (CR) is based on the average party level (APL). Since the party members are now all the same level, this will make encounter design easier too. And just so you are aware, the APL is increased by one for a 5-6 player group, so most encounters will be slightly higher CR than the group’s level.
1st-level starting characters begin play with 10 XP. Characters levels up for every 10 XP gained. For example, at 20 XP you become level 2, at 30 XP you become level 3, and so on.