The answer to this depends upon your market. For example, classes in Vancouver will be more costly than in Victoria or Abbotsford. You need to do your market research and see what other studios are charging. If you are a new instructor you must expect to be paid less than a senior instructor (5+ years of teaching experience) You want to charge a competitive rate, but not be in a position where you cannot raise your fees as you become a more seasoned instructor.
I suggest a FIRM 24 hour cancellation policy. This will allow you time to find another client to fill the space OR arrange your personal schedule for other activities. Private clients will appreciate your time and respect your policy. If a client cancels after 24 hours, let him or her know that you will charge them; however, give them something "extra" the next time you see them, such as an article on their particular interest or new exercises to show them you spent "their time" doing something for their benefit. After all, you did charge them for one hour's work!
For group participants, I suggest they fill a vacant space the SAME week, if you have anything. Otherwise they are obligated to pay for the missed session. Even if the class is taught at a beginner level, the client will benefit from attending and working on good form/movement as opposed to intermediate classes that add more choreography. It is best to ask clients to pay for a package of sessions and make it clear on their waiver/receipt of your cancellation policy.
You can access excellent information on the history, benefits, and basic principles of STOTT PILATES™ at Merrithew Health and Fitness. Go to https://www.merrithew.com/aboutus/resources to view various articles, which you can download and share with your instructors and clients.
Check out the Frequently Asked Questions at http://www.merrithew.com/stott-pilates/faq