Thank you for using justanswer.
What your employer has done is treat this payment as a lump sum (because it was), but unfortunately, lump sum payments are subject to 25% Federal withholding.
Please see below:
I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me.