The Root of the Behavior
Dogs are also territorial animals. Many of them will stake out their property by "marking" their home base with urine to inform other animals that your house belongs to them. Other dogs bark in a seemingly aggressive manner to warn off people and other animals that, to him, are encroaching on what is his. But our dogs don't just want to mark the place they live as theirs, they also want to leave a lasting impression that we belong to them as well. The most effective way that our dogs can accomplish this is by leaving their scent on us through the glands in their feet or by rubbing their faces against us. You are the most important part of your dog's world, and he doesn't want some random dog down the street thinking that he's going to come in your home and stake a claim with his person. Your dog wants to leave no doubt in any other dog's mind; you are his and his alone, and the best way he can get his message across is by ensuring that you smell just like him!
Another plausible theory is that your dog is simply finding a way to get warm, and this is very consistent with his choice of your head as the ideal landing spot. Your head is the area of the body that releases the most warmth. While over time this makes you cold, Fido is the happy recipient of the blast of warm air being released from your skull. Dogs intuitively know that to conserve body heat, it is best to cuddle up with other warm bodies. You see this in puppies from the time they are born. They cannot see, they cannot hear, and they really have no means to communicate whatsoever, but they are born with the instinct to gravitate towards a heat source. Their ideal heat source is their littermates and their mother, and without access to this, they will die. Since dogs are equipped with powerful survival instincts, the drive to secure warmth is incredibly strong. Your little canine opportunist loves you, but he is also smart enough to know that huddling up next to you is the best way to stay toasty warm. A win-win for Fido!
Encouraging the Behavior
Still another consideration is that this could just be attention-seeking behavior. After all, Fido hasn't seen you all day, and he missed you! You can easily ignore a dog pawing at your leg or your arm. You can complacently pat a dog that is resting in your lap. But you cannot ignore a dog that is on your head! If active attention is what Fido is hoping for, there is no better way to obtain it than by making your head his perch.
Dogs generally respond to whatever we reinforce. If you don't like your dog laying on your head, you can correct this problem simply by removing him and praising him for assuming a different position. If your dog's whole intent is to get you engaged with him, he will have achieved his objective for climbing on your head in the first place, and this, in itself, is very satisfying for your dog.