Please becareful, the advice repeated here is incomplete. If you ask support they will also give incomplete advice.
There are two types of subdomain - those created by creating a new installation of WordPress on your server (at my host in my case) and those created through a multisite WordPress installation.
Only subdomains created using multisite (also called network) are covered by a single licence. this is because they are only one installation.
To be crystal clear the standard licence only covers one wordpress installation.