how do magistrates work out how much to fine a guilty defendant

The answer is simple - means testing

Let me explain

If you are a high earner - that means anybody with above average earnings it is NEVER a good idea to appear in court to face the charge if you can plead guilty by post. Traffic violations are the perfect example.

If you appear in person you'll be ask to complete a means testing form and from that the magistrate can work out the appropriate fine.

Conversely

If you are a high earner and do not appear in court and do not submit a means testing form the magistrate has no option but to base the fine on average earnings - those are the current guidelines. That will be a massive reduction if you earn say 120K per year.

However if you a below average earner that the opposite will apply.

In this case it is always better to appear in court and plead poverty or submit a means testing form that way you'll be fined in accordance to your earnings i.e. at a much lower rate.