Onsite wastewater treatment systems and small scale packaged wastewater treatment plants have been used on a large scale in developing and developed countries where centralized sewerage facilities are not feasible. Generally, onsite systems continuously work under significant variations in both quantity and quality of the influent wastewater. Therefore, their suitability needs to be assessed before installation and operation to ensure their suitability and sustainability. This paper aims to define a set of context-specific criteria to assist in selecting the best onsite wastewater treatment system and to break down these criteria into measurable parameters. Furthermore, the developed multi-criteria assessment tool was validated using the results of the performance monitoring of a selected wastewater treatment system. This work is important since the selection of onsite systems, in many cases, is done based on declared performance by the supplier and the costs involved.