It is cumulative (text):

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Posted by The Dark Angel on April 28, 2000 at 06:34:04:

In Reply to: One penalty exp for races is it multiple? (text) posted by wonderer on April 28, 2000 at 06:07:47:

All things are calculated based on your
class/race combo base experience cost. This
is 1500 + Penalties. All future levels will
cost you a multiple thereof.

So yes, for a Dark-elf, it doesn't cost just
50*100=5000xp more to hero than a human would.
It actually works out to cost a Dark-elf
Warrior something like 590,000 xp to hero,
versus just 440,000xp or so for a human
warrior. Adding class penalties makes it
worse, so a storm giant paladin needs something
like 710,000xp, I think.

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