Leveling Up

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The equation for experience gained is calculated as follows = (EnemyExpReward * (1.0 + NewGameLevel * 0.4) + 30 * NewGameLevel - PlayerLevel * 3) * ExpMultiplier

EnemyExpReward = base exp rewarded by killing the monster, for specific values see the monster wiki pages

NewGameLevel = the current difficulty setting of the run in progress

PlayerLevel = current level of the character you are playing

ExpMultiplier = %experience gain enhancers that come from items and buffs (all stack additively)

Level Cap

The level cap is 20. You no longer gain exp once at level 20. The level cap increases by 5 for every time the character beats the game and goes into New Game plus (aka NG+).

Level cap = 20 + CharacterNG+ * 5

You can check your character's level cap by hovering over the EXP tracker in your character menu.

Skill Stars

You gain 3 Skill Stars for each level your character gains that you can be spent at the Guild Hall to upgrade your skills, the Magic Anvil to attune items whose blueprints you've found, or the Bestiary to attune yourself against monsters, increases damage dealt and lowering damage taken against that monster.
The number of stars gained also increases after every 5 character levels (see table below).
The scaling stops at 10 stars. i.e. Level 50->51 will reward the same amount as level 35->36, 10 stars.

Levels Stars Gained
1-5 3
6-10 4
11-15 5
16-20 6
21-25 7
26-30 8
31-35 9
36+ 10