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We present latency analysis of an efficient bandwidth allocation algorithm for Passive Optical Networks (PON). Ratio-Counter based Dynamic Bandwidth Allocation Algorithm (RC-DBA) was proposed in our earlier work. This paper presents a latency based mathematical model for RC-DBA and its comparative performance with respect to other algorithms. Scenarios for light and heavy traffic have been analyzed. Results show that RC-DBA performs better in terms of efficiently allocating bandwidth among ONUs. ONUs those do not require bandwidth are not allocated a slot. Unused slots are allocated based on requirements (residual or new) given by ONUs. ONUs those require bandwidth are allocated multiples of a dynamically calculated unit based on ratio counting. RC-DBA provides better latency performance than other schemes for both Poisson and Pareto distributed arrivals.