I got from REI a Marmot Tungsten 2 (meaning 2 person, but it's actually a 1 1/2 person tent which is what I wanted so I had space for my gear inside the tent) and I set my tent up on the rear rack sideways instead of longwise and it stick out no further than my rear panniers do.
I have a bungee net I use to keep it securely in place to the rear rack, it doesn't shift even slightly while riding.
As a side note, I put my tent in the bag it came with and it all goes in a trash bag just to make sure it doesn't get wet in a rainstorm, I haven't tested the tent bag for rain, but it keeps the tent bag cleaner as well.
I actually love that Marmot Tungsten tent, it's not the lightest option, but the fabric is tougher than the lightest options that I saw, some were calling it a 3 1/2 season tent because of the fabric used. The best part of all, it wasn't terribly expensive, it goes up and comes down fast, and in a torrential rainfall I endured for about 2 hours I didn't have one drop of water inside, and it comes with a ground tarp. So for the money, or you're on a tight budget like me, I think it's a great tent. I can't say if it will last a long time, I've only used it on 5 short trips, but so far so good. My last tent didn't last long so it's now a the grandkids play tent, and that last tent I had cost a bit more than the Marmot, but I got the Marmot on a huge sale at REI.