We present the results of ab initio studies of the structural and magnetic properties of the Pd host matrix doped by Fe atoms at various concentrations. By means of the density functional theory, we deduce that iron impurities are able to initialize significant magnetization of the Pd atoms, when the impurity concentration exceeds 3 at.%. We also demonstrate that the induced magnetization depends on impurity positions in the host matrix, in particular, there is a maximum of magnetization for a uniform distribution of the iron solute.