Please rate package!!

175'000 CHF p.a. is not a bad income at all.
However, you seem to be looking for the most expensive things and places in Switzerland.
Accomodation prices in central Zürich can be astronomous. Check out www.immoscout.ch (look for a 5 room flat if you want a 4 bedroom flat) and you'll see that prices start at 2'500 CHF per month and rise quickly to 4'000, 6'000, 8'000 CHF per month. The sky is the limit.
Private schools don't belong to the cheap things either. Don't be surprised to pay 1'750 CHF per kid per month - excluding books, catering, transport, ... Consider whether you really need this - the state school system is usually ok and allows your kids to blend in with the locals.
Taxes: check out www.comparis.ch and you'll find out that the "Quellensteuer" is 16'292 CHF per year. This does not include social insurances (take approximately 10% for that) and pension schemes (depends on your employer).
Don't forget mandatory health insurance: again comparis.ch would be your first source for information. The most basic insurance with high franchises (2'500 CHF per adult and 600 CHF per child per year) will easily cost you 7'000 CHF per year.
With 2 cars, you'll quickly find out that central Zurich is a big traffic jam with high parking fees. Public transport is excellent though.

Don't want to disappoint you - just want to give you a realistic impression of what to expect. Switzerland is *expensive*, Zurich double so.

Twan.

It's important for you to clarify if the CHF175k is before or after tax. normally for foreigners, tax is deducted at source, i.e. directly from your salary, so you need to know if the CHF175k is already net, or if you still have to deduct and account for income tax. Also, to calculate your monthly salary, you normally devide the annual amount by 13 (not 12) because you will be paid 12 times a normal monthly salary and in June and December you will get 50% each time of what the swiss call the 13th salary. 
As a rule, you should not spend more than a third of your monthly salary on accommodation, to leave enough for other costs and expenses (and may be a holiday or a trip back home .
Two cars may be expensive to run (road tax, insurance, petrol), but you may be able to find small economic cars, perferrably with a diesel engine to save on fuel.Otherwise, public transport is excellent and normally covers all daily needs for work, shopping, school etc. I also agree with Twan that the normal public schools are very good and usually accommodate foreign (english speaking) students very easily, so a private school is not necessarily the best.

Many thanks for the replies....

My 2 kids....one is only 8 weeks old so some time for schooling....re schools...my older one has only been going to international school so I assumed it would make sense to continue that way.

My salary is net. Reading the replies, so to get a comprehensive insurance policy for the family, it would cost around 10K CHF a year? Correct?

Also please explain re 13th salary so I can discuss with my employer.

Many thanks

About insurance: the 7K is just for basic health insurance, and doesn't cover any other insurances you might wish. Nevertheless, health insurance usually is the biggest part of insurance costs. Take in mind that many people extend the basic health insurance by (optional) extra packages. Some of these packages are worth considering. Particularly:
-dental care for children
-basic insurance only covers treatment in the canton where you live (Zurich in your case). Outside these cantons, only emergency treatment is covered.

Many companies pay 13 monthly salaries per year: one each month, and the 13th one is usually paid
- either in two parts (june and november/december) as explained by Swissagain
- or in one part (in november or december).
Ask your employer whether the 175K net includes the 13th month or not.

An international school may be worth considering if you are expecting a lot of country switches during the next years of your carreer. In that case, the children may get confused by learning a new language time after time again - an international school may offer more stable education in such a situation. Zurich has international schools, check out at www.issh.ch, www.zis.ch, www.swissinternationalschool.ch, ... (google offers quite some items when you search for international school zurich).

Hope this helps,
Twan.

Many thanks Twan

So would my understanding of 10K for insurance be a very low figure if i wanted a comprehensive insurance?

Re school we have looked at ZIS and ICS and are currently on waitlist however for ZIS we have been given a space in Baden which I am not too keen on.

Will check from employer re 12/13 month salary

So to summarise the net salary of 175k is a decent one? Also what are the areas you would suggest to consider for living?

Whether 175K is decent, I cannot judge. It also depends on the job, of course. But 175K is definitely a higher income in Switzerland, most people earn less.

For health insurance, I strongly suggest to check out www.comparis.ch for basic insurance, and to visit the websites of some of the main health insurance companies for additional insurance. To give you an impression: my wife and I pay 6'732 CHF p.a. health insurance. For this, we have a low franchise for my wife (the 300 CHF minimum, which is sensible as she regularly needs to see a doctor) and a high franchise for myself (about 2'000 CHF). We chose one of the cheapest insurance companies, and we only have a limited additional insurance (mainly covering treatment in other cantons than the canton we live in). We have no children, so no insurance costs for them either. Yes, I would take 10K as a lower bound for your family.

Living areas: I don't know Zurich very well myself as I don't live there. It will highly depend on where you work, and what your other preferences are. If you fancy to live in the heart of a "big" city, central Zurich would be the place for you - and you would have to pay the price (in Swiss Francs, that is) for it. Zurich isn't that big for international standards -you can't compare it to London, Paris or Singapore- but it is by far the biggest city in Switzerland.
About Baden: I can't judge the ZIS in Baden. But Baden is a nice little town. Down town Zurich is a 16 minutes non-stop train ride (every 30 mins), and if you would like to send your child to an international school and Baden is the only option, may be you could take into consideration to live in Baden instead of Zurich.
Living a bit outside the big city is not unusual in Switzerland, and usually cheaper. (Exception: the north-eastern coast of Lake Zurich is called "Gold Coast" and is one of the most expensive/posh places to live.) Of course, this also highly depends on your personal preferences!

Hope this helps,
Twan.