By using density functional theory calculations, the initial steps towards Pd metal cluster formation on a pyridine‐terminated self‐assembled monolayer (SAM) consisting of 3‐(4‐(pyridine‐4‐yl)phenyl)propane‐1‐thiol on an Au(1 1 1) surface are investigated. Theoretical modelling allows the investigation of structural details of the SAM surface and the metal/SAM interface at the atomic level, which is essential for elucidating the nature of Pd–SAM and Pd–Pd interactions at the liquid/solid interface and gaining insight into the mechanism of metal nucleation in the initial stage of electrodeposition. The structural flexibility of SAM molecules was studied first and the most stable conformation was identified, planar molecules in a herringbone packing, as the model for Pd adsorption. Two binding sites are found for Pd atoms on the pyridine end group of the SAM. The strong interaction between Pd atoms and pyridines illustrates the importance of SAM functionalisation in the metal nucleation process. Consistent with an energetic driving force of approximately −0.3 eV per Pd atom towards Pd aggregation suggested by static calculations, a spontaneous Pd dimerisation is observed in ab initio molecular dynamic studies of the system. Nudged elastic band calculations suggest a potential route with a low energy barrier of 0.10 eV for the Pd atom diffusion and then dimerisation on top of the SAM layer.