When considering this question it is important to first outline the different types of class levels found in English language classrooms worldwide. A fairly common classification of EFL teaching levels is indicated by the book resources available. If you consider book series such as, Reward, New Headway, and many others, you will find five levels.
These levels are, Starter (or Beginner), Elementary, Pre-Intermediate, Intermediate, and Upper-Intermediate.
Now we have established the general language levels of students, we can now consider the four skills of English.
The four skills
It is very important to remember that there are four skills that are required by any language user. These four skills are, reading and listening (known as the receptive skills) and writing and speaking (known as the productive skills). Your lesson should not only cover particular areas of grammar and vocabulary, but also integrate these different skills into each lesson wherever possible.
Typical grammar and vocabulary topics studied at each level
Real starters will need to learn the Roman alphabet first. Then the main focus at this level is vocabulary and some very simple sentence structures. Vocabulary is usually presented through topics such as shapes, colors, machines, clothes and so forth.
Here we are increasing vocabulary and introducing parts of speech, such as nouns, verbs, adverbs and adjectives. Sentence structure and simple grammar forms, such as present simple and present continuous are also studied. In pre-intermediate, simple past and future forms are presented.
Here we build upon all the previous levels to study all tenses (12 main ones typically, plus a few others). More complex grammar items are also studied in these levels, such as direct and reported speech, transitive and intransitive verbs, conditionals and so on.
EFL exams and correspondence of levels
One of the most used measurement systems for English language learners is the Common European Framework of Reference for Languages (CEFR). This presents the language learner level on a scale of A1, A2, B1, B2, Advanced, and Expert.
These match our previously stated levels as follows:
- Starter = A1
- Elementary = A2
- Pre-Intermediate = A2/B1
- Intermediate = B1
- Upper- Intermediate = B2
- Advanced level is C1 and Expert level is C2.
Most EFL classes take place between A1 and B2 and the grammar knowledge and understanding beyond these is well above the typical native speakers' learning experience.
Students who are learning English for university entrance or to work abroad may be studying for IELTS or TOEFL examinations. Teaching for these exams may well involve C1 level teaching. You should make sure before undertaking any teaching position what level of students you will be teaching and what proportion of your teaching timetable applies to each level.
If all your lessons are at B2 and above your lesson preparation time is likely to be very high.
In answer to the question, you can see that grammar knowledge is important, unless you wish to focus your career entirely around kindergarten or very young learners.
Students, particularly those working towards some form of examination, be that internal (for their school) or external, such as IELTS, will have to demonstrate considerable grammatical knowledge. If you are going to teach it, then your knowledge must be higher than the highest level you aim to teach.