‘On-plot’ systems in which safe disposal of excreta takes place on or near the housing plot; pit latrines and septic tanks fall into this category.
‘Off-plot’ systems in which excreta are collected from individual houses and carried away from the plot to be disposed of; sewerage is the most important option in this category.
The selection of the most appropriate sanitation system is influenced by technical, cultural, financial, and institutional factors;

More about on-plot systems
The pit latrine is relatively low cost; it consists of a superstructure which affords privacy to the user, a hole (or seat) set into a slab which covers the pit, and a pit beneath the slab into which excreta and anal cleansing materials are deposited. Pit latrines are not used in conjunction with conventional flush toilets; only a relatively small volume of water enters the pit and liquid is allowed to seep from the pit into the surrounding ground. Whilst in the pit, excreta undergoes decomposition into humus-like solids, water, and gases. The important point is that because of the long storage time in the pit, disease-causing organisms (pathogens) are eventually killed.

The septic tank is relatively expensive; it comprises a sealed tank having both an inlet and an outlet into which excreta are flushed from a conventional cistern flush toilet. In the tank, solids settle out and undergo a process of anaerobic decomposition resulting in the production of water, gases, sludge, and a layer of floating scum. The effluent which flows out of the septic tank is commonly disposed of through absorption into the ground using a soakage pit or trench. This may require a large area of land which limits the plot size and housing density for which septic tanks are a feasible option.

Problems and Solutions
On plot systems have been widely recognised as an appropriate solution for rural areas; however, there has been much less acceptance of their suitability in urban areas other than the use of septic tank systems in largely middle or high income areas. Professional engineers and planners sometimes hold quite negative views about using pit latrines in urban areas. For example.

Pit latrines are smelly and attract flies; bad ones do – but there are many simple developments to the basic system (covered latrines, pour flush latrines, ventilated improved latrines) which vastly improve matters resulting in high user satisfaction.
Pit latrines cannot be used on small plots; wrong – there is evidence of widespread use on plots as small as 20 square metres
On-site systems pollute groundwater – so do a lot of other activities; but what is the real risk from on-plot sanitation?
The Sanitation vs. Groundwater debate
This issue deserves special mention because it is the subject of a complex debate concerning the need for a clean environment on the one hand and improved health through sanitation on the other. Arguments revolve around the acceptability of certain levels of groundwater pollution in order to achieve public health benefits from household latrines. One extreme view is that ‘groundwater is sacrosanct and must never be polluted’; the consequence of this is that large numbers of people end up with no latrines because all on-site solutions are ruled out, even thought they are all that is affordable
The other issue which is often conveniently overlooked is that groundwater pollution also results from leaking sewers, small and large scale industrial activity and solid waste disposal to name but a few. The other extreme would countenance gross pollution of urban aquifers, which is equally unacceptable.

Operation and Maintenance
An important advantage of on-plot systems is that the householder or user group is responsible for undertaking and funding the entire operation and maintenance of the latrine. Whilst construction may have been subsidised, there is no need for perpetual subsidies to cover recurrent costs which are such a feature of sewerage systems. Pit emptying is the major operational expenditure for on-plot sanitation; most of the time, householders need to make their own arrangements. The filling/emptying cycle obviously depends upon pit/tank size, but for many householders this is every 3 to 6 years.

This contrasts quite strongly with the operation and maintenance of sewerage which is considerably more complex; there has to be a competent, experienced institution with clear responsibility for operation and maintenance and mechanisms for recurrent cost recovery also need to be in place.