No tests or grades or grade levels are necessary when you homeschool.
You may choose to use them or not. You could just identify areas that are not mastered or learned well enough yet and work on learning them better. In the early years, many people are very comfortable with letting their children learn in a more natural way at their own pace. You can get a general outline or list of skills that are taught in a cumulative way, meaning they build on each other, and use that to go by.
Or you can use books at a certain grade level that corresponds more or less with the age of your child and teach the topics that are covered in that book. There are many ways to determine what you should teach your child when. Some people feel that giving grades is a way of rewarding externally. I believe that children should really learn because they want to know something or they have internal motivation to accomplish goals and master skills. I believe this is a deeper, more thorough type of learning process.
The high school years don’t require daily grades or grade levels or tests, either. It’s up to you. If you feel more comfortable giving grades, and you have time and a system for keeping track, then you should do that. You are the boss of your homeschool. You get to decide how you do it. I just offer this alternative to you, in case you are not aware that it is an alternative.
When it comes to transcripts and diplomas, there are ways to do those even if you haven’t used grades throughout your years of homeschooling. Here is a good post https://simplehomeschool.net/transcript/ to help you develop a transcript even if you have used a more relaxed approach even through high school. I have designed transcripts for many people that have worked just fine to get them into college or into a job they were applying for.
This is what I have done. I have not used grades, grade levels, or tests, and I have found that it works well. My kids have been able to get jobs and do well in the things they have endeavored. They are mature and well-adjusted, for the most part. They have been complimented by management, fellow employees, and clients for their maturity, skills, and good work ethics. My kids have been commended for their ability to come up with solutions and to think outside of the box. I think it’s because they have had freedom to experiment, think deeply, try new things, and have not had the pressure of trying to make a good grade that would hinder their creative efforts.