When you convert a character (Lv.50+) to a mercenary, he loses about 20% of his total EXP. For details on making mercenaries, see v2.1.18 Feature: Mercenary Contract. The following table is taken and translated from NPC转成卡片后经验值减少对照表, showing the level and EXP before and after merc.
A veteran character needs about 3.5% EXP to remain a veteran after becoming a mercenary. An expert character should need about 13% EXP or so to remain expert.
The above table uses the veteran progression before v3.0. For v3.0 level progression, see here.
Furthermore, if a veteran/expert character drops level due to becoming a mercenary, he will automatically be promoted when he regains the lost levels without needing the use of promotional scrolls.