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I have searched the internet and documents in Pathfinder to find out the rules regarding a PC's death and the penalties for making a new character.

For example, say I have a character of level 10 + 1k xp and he dies. I decide I would rather player a new build so I roll a new character. Relative to the dead one, what would be the penalties?

In 3.5, my new character would be level 9 + half xp between level 10 and level 9 afaik.

We just started playing in Pathfinder and its something to consider before it happens.

If its up the DM, what commonly acceptable penalties would there be?

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New characters are made at level 1 with zero XP; anything else is a house rule. I don't know about "Commonly accepted" but we ruled that your new character has the same XP as the lowest-level character in the group would have if they got raised. –  medivh Oct 9 '13 at 14:19
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@medivh You are incorrect. There are rules for starting characters at levels and XP values other than 1 and 0, respectively, whether it be at the start of a campaign or in the middle with a new character. –  KRyan Oct 9 '13 at 16:16
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There are none, in 3.5 or Pathfinder. Continuing an existing character via raise dead or similar caused the loss of a level in 3.5, which set your XP to halfway between your previous level and the one you used to have. Extrapolating that loss to a new character may be consistent, but honestly, these penalties have always struck me as extremely poor ideas. Apparently Paizo agreed, since it removed them for Pathfinder, but there is still a “permanent negative level” (which can be removed with restoration or the like) that I still think is a bad idea.

Players should be invested in characters. They should not want characters to die. Losing a character should be “punishment” enough. And if they do want characters to die, because it’s either dramatic and cool (“a good death”) or because they’re simply tired of the character, that is good for the game because the former makes a good story and the latter means they’re enjoying the game more, which makes them more invested.

So death is its own punishment, or if not, the player doesn’t deserve to be punished. This is a game wherein people are investing their own free time to play with you and tell a story, to do amazing things, and so on. Rules which are going to limit their ability to play are not a good idea. Being a lower level is very difficult and complicated to play, and does tend to make a player feel punished. This is a game, there shouldn’t be any “punishment!” Death is just another part of the story.

And most of all, having a split-level party is an extremely annoying thing to deal with as a DM. You have to calculate XP separately for them, and you have to consider their lower level in every encounter, which gets very annoying, very quickly.

For more ideas on how to handle death in ways that aren’t, well, punitive, I suggest How do I not cheapen death, while also respecting my players' time? I, too, had a lot of concerns along these lines, and the answers there helped me a lot.

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Forgot to mention the gold, a good point. That’s the “drama tax” since death being reversible makes the risk of death less dramatic, so you have to pay for it ;) Though I’ve also seen that waived, too, with no ill effects. Most players don’t want their characters to die, even if they do “come right back,” because the point of the roleplaying is to play them as people who really don’t want to die, regardless of whatever plot armor you give them to let them continue playing. –  KRyan Oct 9 '13 at 12:57
    
Worth noting that lower level characters don't get less (or more) XP for a given encounter in Pathfinder - they just need a smaller relative amount to level. –  Bobson Oct 9 '13 at 19:21
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In the Pathfinder rulebook, page 403, they discuss handling PC death - they basically say "let 'em make a new character, and consider whether the old guys splitting up the dead guys' gear is a problem for you." They don't mention starting at existing level vs level 1 vs something else. Also see "Death of a Hero" in the GMG p.67 for dynamics thereof and deciding on rez vs new character. This is stuff in the books, not in the SRD so you may want to read those...

Back in the day in D&D, it was always "you start again at level 1." By the time everyone gets enough XP to level you're caught back up given the geometric nature of the XP table. People got softer since then, hence the march towards "one level down!" and now "same level!"

We generally allow same level new PCs, but we don't like the new PC 100% customizing their loadout with WBL; none of the existing characters are allowed to infinitely magic-shop to optimal loadout so there's some rolling involved.

Do note that there's no level penalty for Raise Dead or Resurrection either, it's worth revisiting all this if you've played 3.5 because it's all different.

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