Work functions of Pd-based bimetallic surfaces, including mainly M/Pd(111), Pd/M, and Pd/M/Pd(111) (M = 4d transition metals, Cu, Au, and Pt), are studied using density functional theory. We find that the work function of these bimetallic surfaces is significantly different from that of parent metals. Careful analysis based on Bader charges and electron density difference indicates that the variation of the work function in bimetallic surfaces can be mainly attributed to two factors: (1) charge transfer between the two different metals as a result of their different intrinsic electronegativity, and (2) the charge redistribution induced by chemical bonding between the top two layers. The first factor can be related to the contact potential, i.e., the work function difference between two metals in direct contact, and the second factor can be well characterized by the change in the charge spilling out into vacuum. We also find that the variation in the work functions of Pd/M/Pd(111) surfaces correlates very well with the variation of the d-band center of the surface Pd atom. The findings in this work can be used to provide general guidelines to design new bimetallic surfaces with desired electronic properties.