A Pd-Ni alloy thin-film coated surface acoustic wave (SAW) device is proposed for sensing hydrogen. The Pd-Ni thin-film was sputtered onto the SAW propagation path of a SAW device with a delay line pattern to build the chip-sized hydrogen sensor. The prepared sensor chip was characterized by employing a differential oscillation loop. The effect of the Pd-Ni film thickness on sensing performance was also evaluated, and optimal parameters were determined, allowing for fast response and high sensitivity. Excellent working stability (detection error of 3.7% in half a year), high sensitivity (21.3 kHz/%), and fast response (less than 10 s) were achieved from the 40 nm Pd-Ni alloy thin-film coated sensing device.