The epitaxial rnonolayer of NiO on Pd(100) has been theoretically simulated using a hybrid-exchange GGA-DFT Hamiltonian and a slab model, periodic in two dimensions. This "perfect" system is an essential reference for the simulation of nonstoichiometric two-dimensional phases which are formed during the deposition of nickel on palladium in the presence of oxygen. The adequacy of the computational procedure is discussed, especially as concerns the use of a thermal smearing technique which has been adopted to improve the convergence properties of the SCF procedure and to prevent the onset of nonphysical spin-polarized solutions. The equilibrium configuration corresponds to antiferromagnetic order in the overlayer, with oxygens on top of the surface Pd atoms; the ad-film is slightly corrugated with Ni closer to the surface by 0.1 A with respect to O. The interaction energy is quite small, 0.20 eV/NiO unit (about 5 kcal mol(-1)). correspondingly, the electronic and magnetic properties of the Pd slab and the isolated NiO monolayer are only marginally affected by the interaction.