A hydrogen sensor based on integrated optical waveguide structure is one of the most promising types of the field. The sensor region of the waveguide is covered with a thin palladium layer whose optical constants are influenced by concentration of hydrogen in surrounding medium. A finite difference method (FDM) is used to calculate the field distribution of the structure. The relationship between the waveguide property and the optical constants of the palladium layer is analyzed. The output power of the structure is calculated by an BPM program and an optimal thickness is obtained to achieve maximum sensitivity.