Pathogens and nutrients released from on-site sewage systems represent a risk to surface and ground water quality, particularly where there are sensitive receiving waters such as in drinking water catchments. Buffer zones between on-site systems and waterways are one barrier used to protect water quality. The increased time and distance they provide increases the opportunities for the effluent purification functions of the soil to occur. A risk management model is proposed to assess the efficacy of the buffer zones in Sydney's drinking water catchments. The model is the basis for the development of performance based setback distances for on-site systems from waterways, and incorporates stochastic analysis of pathogen and nutrient transport in the environment and consideration of the effluent quality variability from on-site systems. Catchment-scale integration of contaminant transport is employed to facilitate a risk assessment of on-site systems. The risk management model also allows for the impact of on-site system management and maintenance on catchment water quality to be assessed through scenario building and feedback mechanisms.