We have studied electronic structure of Fe-deposited Au(111) by performing ab initio density functional theory calculations. We find that the magnetic moment on the deposited Fe layer is enhanced as compared to that in bulk iron. We observe a large number of new states on the Fe-deposited surface - one of which is in the majority spin channel having similar dispersion to that on the clean surface, and others in the minority spin channel. The effective mass of electrons in surface states near the Fermi level increases on Fe deposition. The electronic properties are found to be insensitive to the stacking of near-surface layers. We need to use very thick slabs in our calculations to avoid splitting of surface states due to spurious interactions between the two surfaces of the slab. Using the local density of states profiles for different surface states, we conclude that in scanning tunneling microscope experiments one can detect two of the surface states - one in the majority channel below the Fermi level, and another in the minority channel appearing just above the Fermi energy. We compare our results to those from scanning tunneling spectroscopy experiments. (C) 2012 Elsevier B.V. All rights reserved