Using density functional theory formalism, we have investigated the adsorption behavior of thiols on the Pd(111) surface. Two different thiol molecules. viz. (a) methane thiol and (b) thiophene 2-thiol (TSH), were used as model adsorbates for this purpose. The results revealed that whereas the methane thiol molecule undergoes spontaneous dissociative chemisorption onto the palladium surface, the adsorption of the thiophene 2-thiol molecule does not involve cleavage of the S-H bond, leading to weak interaction energy or physisorption. The variation in the adsorption behavior has been explained based on the difference in the electronic environment of the terminal sulfur atom. The nature of binding at the interface has been analyzed through calculation of the partial density of states of the sulfur atom at the interface.