Does notes on ios7 have subfolder capability?

Notes.app on my Mac has subfolders that makes organization much more accessible and easy to use. I don't see those subfolders on either my iCloud account or on my iPhone running ios7. Can you have subfolders in Notes in ios7?

If so, how do I get them to show up. What I see now on my phone is just a list of all folders with no distinction between folders and subfolders. Is this as it should be?

Thanks.