We examine the adsorption of a single Ni atom on a monolayer of MgO on a Ag substrate using DFT and DFT+U computational approaches. We find that the electronic and magnetic properties vary considerably across the three binding sites of the surface. Two of the binding sites are competitive in energy, and the preferred site depends on the strength of the on-site Coulomb interaction U. These results can be understood in terms of the competition between bonding and magnetism for surface adsorbed transition metal atoms. Comparisons are made with a recent experimental and theoretical study of Co on MgO/Ag, and implications for scanning tunneling microscopy experiments on the Ni system are discussed.