1. Login to your cPanel and click on the addon-domains icon (cPanel > Addon Domains)
2. Enter the name of the Addon domain in the blank field next to New Domain Name:
3 Enter the name of the directory which contains the subdomain that the addon domain will point to in the blank field next to Username/directory/subdomain Name: (This directory will be the location for the Addon domain's files, just as public_html is the location for your domain's files.)
4 Type in the password for the new Addon domain, and click on Add Domain!
Note1: You can upload files directly to this Addon domain using the username and password for the Addon domain to log in through ftp.
Note2: Addon domains will need to be registered with a valid domain name registrar before they can be added. Make sure that your account has the ability to use addon domains before attempting to add one.
About Addon domains:
Addon domains are handled like subdomains as far as the server is concerned but to the outside world they are separate domains.
When you setup an addon domain, you enter the domain name (without www.) and the system will automatically suggest an appropriate folder and will create that folder so don't make the folder first.
You can enter any password you like, it doesn't have to be the same as the main domain.
You don't need to create a subdomain for the addon domain.
An ftp account is created for the addon domain so when you ftp using that ftp account it will direct you to the created folder for that addon and that's where you will upload the addon site.
If you need to change the password for the addon you do it through the ftp manager.
To view stats for the addon you look under subdomain stats.
You will setup emails for the addon domain in the main cpanel. Addon domains on a shared account do not have their own cpanel.